Azn0nislayer, who you are talking to in the picture, is wrong. You NEED the watch, sextant, and chart. To get them, EXAMINE your clue (you MUST do this) and go to the house near the Observatory, which is southwest of Ardounge. Talk to the Professor there and ask about treasure trails. NOTE that if you have STARTED the Observatory Quest, you will NOT be able to get him to talk to you about treasure trails, and will need to finish it. He will tell you to talk to two people. One is Brother Kojo at the Watch Tower, south of Ardounge, and Murhpy at Port Khazard, south of Ardounge. They will give you a watch and sextant. Return to the house and talk to the Professor. Now go back and dig.