Flooding the Cloakwood Mine is a "feeder" quest for the Chapter Four story-line. It is initiated by speaking to either of two Miners in the first subterranean level of the Cloakwood Mines. The more important of the two is the unnamed miner found at 1975.245 near the river plug. The other one is called Phaersis and he is found at 350.1850.
Talk to the miner near the river plug with the Key to River Plug in your possession to flood the mine.
Note: If you plan to have Yeslick in your party while doing this quest, you must flood the mine within two weeks or he leaves.
Journal[]
Miner One[]
When you speak to the miner near the river plug, you are notified of two journal updates, one for "Crippling Cloakwood" and another for "Flooding the Cloakwood Mine". What you find instead are two entries under the new "Flooding the Cloakwood Mine" quest:
Quest title: Flooding the Cloakwood Mine
Entry title: (untitled)
An enslaved miner has told us that there's a way to destroy the Iron Throne mine in the Cloakwood. A steel plug blocks the flow of an underground river. If the plug were released, the water would flood the entire mine. Only the master of the mine has the key to the plug.
Entry title: Flooding the Cloakwood Mine
I have a way to disable the Cloakwood mine. I must remove the plug that prevents water from pouring in and thus flooding the mine. Removing the plug will be no small feat, however, as it is magically sealed. I should search the mine for whomever created that seal.
Given that they say roughly the same thing, it seems probable that one of these entries was meant to replace or supplement the Important Events: Crippling Cloakwood journal entry.
Miner Two[]
When you speak to Phaersis on the first level, he will tell you where to find Davaeorn. He also mentions that the fourth level is a "secret" level, something that is left out of the Journal entry.
A miner told us that the leader of the mine lives on the fourth level of the mine.
Deserting Guard[]
The guard at 1925.940 on the second level offers information if you will spare his life.
An Iron Throne guard told us that we could find Davaeorn on the fourth floor of the Cloakwood mine.
Yeslick Orothiar[]
It is unsurprising that the last surviving dwarf of the clan that built the mine should have quite a lot to say about freeing his ancestral home from the Iron Throne.
The dwarf Yeslick has told us a great deal about the Cloakwood mine. He and his clan used to work in the mine, but they dug into an underground river. In the ensuing flood, most of Yeslick's clan died. Yeslick later met the man known as Rieltar, an important figure in the Iron Throne. With Yeslick's help, Rieltar reopened the mine for the Iron Throne. Yeslick tells us that a mage called Davaeorn runs the mine from the fourth level. If we were to get a key from him, we could flood the entire mine site.
The End[]
After giving the Key to River Plug which you get from killing Davaeorn to the miner waiting at the plug, a cutscene takes you to the surface. The journal entry redundantly titled Flooding the Cloakwood Mine ("I have a way ...") is copied from Chapter Four Quests to a new Chapter 5 Quest, and then the quest is closed with one of two entries depending on whether or not you gave Rill 100 
to evacuate the slaves.
I have flooded the Iron Throne mine in Cloakwood. Before opening the magical plug, I helped the innocent slave miners to freedom. Hopefully the destruction of such a valuable resource will be a serious setback to whatever the Iron Throne has planned.
-or-
I have flooded the Cloakwood mine, killing anyone who remained inside. My party and I barely escaped the onrushing waters, and I have dealt a great blow to the Iron Throne.
And what's more ...[]
Completing this quest has other Journal repercussions:
- Important Events:Baldur's Gate is added to the Chapter 5 Quests section
- If you questioned the mage Stephan earlier, an entry will be added to the Journal section summarizing what he said.