Treasure hunt on Faroe island
Hidden in the depths
Go to the southern coast of Faroe island and find the body of a castaway (M19,2). Take the letter and the key. Read the note. The approximate location of the treasure will be marked on your map. Go to the marked location and dive. Watch out for echidnas that are nearby. Use witcher senses, the chest will shine in red. Inside you will find Horned Hoskuld's Sword. Sadly, the sword will be damaged, so you must go to the blacksmith to repair it, but the quest will be completed anyway. The sword is needed for the Iron maiden quest. You can also use it normally.
To start the quest you must reach a small isle North from Faroe (M19,5) and take a book from the body of a sailor. Read the notes you found. The approximate location of the treasure will be marked on the minimap. Swim there with a boat. Watch out for sirens (level 13). The treasure chest is lying quite deep, so you must watch out not to run out of oxygen.