Not too long into the game, you'll come across your big free-roam area, Croakwood, just after leaving the village, Markovna. In this area, you'll find 3 things. A well, a sword in a stone, and an elite mob somewhere on the map.
This elite mob will drop an ancient coin. You'll then want to head to the well, throw the coin in, and kill the mobs that spawn from this well. One of these will drop oil with other loot, so go ahead over to the Sword in the Stone, and you'll be able to use the oil to loosen it up and pull it out, getting loot and this trophy.
Below in the picture, the red circle is the well, and the green circle is where the sword in the stone is. There's no circle for the elite mob as it seems random.