Cloakwood Mine level 3 is where the iron ore is smelted and forged into weapons and amor. There are also bedrooms, barracks, a temple, an armoury and other rooms.
Weak guards, of the 65 xp variety, are encountered mostly one at a time. Hobgoblins and Hobgoblin Elite are encountered frequently, usually in groups of 3-5. Hobgoblins respawn quickly, especially in the barracks area.
Ogre Mage — 2970, 1880 — Uses a combination of mind control and damage spells, including Confusion, Flame Arrow, Horror, Melf’s Acid Arrow, and Agannazar’s Scorcher. Drops 2 Garnet Gems, a Katana +1 and 73 gp.