'Celairant bears the blood of the Rangers of the North, and the name of a great hero is amongst his forebears, a Man I was proud to call my friend and companion. Perhaps Celairant is young as Men count the years, but then all Men are young by my count.
'In ages past, I honoured my fallen companion with a sword placed at his grave amongst the mounds of the Edain. It may be that the sword can yet be found in that place. It bears the motto Elvellon, or Elf-friend in the tongue of Men. Perhaps if you find the sword, that will convince young Celairant not to spurn my gift.'
After allowing Starkath to take the bow from him, Celairant is now certain that he is not worthy of the Elvish weapon.
Find Elvellon, the Elf-sword
The sword Elvellon can be found at a grave marker amongst the mounds of the Edain, north-east of Gondamon. Celairant is at the hunter's lodge, west of Kheledûl.
Penglir has asked you to retrieve a sword which he placed by his companion's grave long ago and take it to Celairant. Penglir is at Guillond.
Bring the Elf-sword to Celairant
The small flat alter sword is resting on is located at the farthest south-western mound in the Emyn Hoedh area. It is the first mound you'll reach if you approach the barrow area from the Grimwater side.
The elf-friend sword can be found at one of the wight mounds at 18.7S, 93.8W. For me, it was one of the southern mounds as I entered Emyn Hoedh on a stone slab with no map marker, but the sword name was visible when I got near.