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The Mithril Insignia is given to prospective Armorsmiths as a symbol of their commitment to the Mithril Order.
The Mithril Insignia is given to Blacksmiths as they start their quest to become a Master Armorsmith.
- Alliance Blacksmiths get the Insignia from Hank the Hammer when they start the quest .
- Horde Blacksmiths get the Insignia from Ox when they start the quest .
In either case, completing the quest demands that you surrender the trinket.
The insignia is actually a 50 Armor trinket. However at level 40+, there are better trinkets to use than this.
Still, it is a lure, a distraction... You turn it in when you complete the quest. Are you dedicated enough to blacksmithing to surrender it?