The Lady of the Lake

The Lady of the Lake gives you Excalibur after her test in Merlin's Crystal. She can be found in Taverley, in the middle of the lake of which Tegid washes his clothes in, which is called Lake Crystalmere. If you have already completed Merlin's Crystal and lost your Excalibur, you can visit her and pay 500 coins for another one.

Trivia

 * The Lady of the Lake is referring to the woman who reached out of the water to catch Excalibur when it was thrown into the Lake when Arthur was dying. She is also the person who originally gave it to him. Because of this, it can be assumed that the Lady of the Lake may have close ties with King Arthur.
 * After completing Seers' Village Diary, she will enhance the Excalibur into an Enhanced excalibur.