this shows up in the cursor of the task requestor on completion of Step 6 of the quest Unbound Chokidai in Gorowyn.
Don't need to do anything with it except add it to your inventory. Spent a week feeding it to the chokidai pet following us before we figured out the trick (don't ask).
Must be in your inventory to get the ravenous basilisks to spawn in step 8.