Dear friends,  

A blacksmith will appear in the new version of the game (0.4b). You'll find him in his forge, near the well. We are currently working on a crafting system that will allow you to create and improve armor, weapons, quest items, and so on. We've listened to your feedback on crafting systems and our system will operate on the A + B = C principle. You'll be able to see the new mechanics firsthand very soon.