I forget where exactly I found the recipe, but I'm pretty sure it was in the Isles of Freedom. I also don't know if the produced item changes from game to game, but I got a scaly Armor (+3 defense). This item was already for sale somewhere else in the Isles, and I had another artifact equipped that was more useful; also, I had to pay gold which was no problem, but I also had to give a couple of runes, which I did reluctantly. So my advice is save your game right before you hand in the recipe to the wizard in the Magic Academy, so that you can easily load if the artifact is not useful for you.
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