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The mithrest dwarf is a bit tough to fight when you are just starting out. You will learn lots of strategies as you continue to play. It really isn't that big a deal that you died. It forces you to learn the strategies that will make you a better player in the end!
Stick with it.
I would go to the Umar Hills and do the quest there. It is pretty easy to do as one of your first adventures.
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