The lens mould is a quest item used in the Observatory Quest. It is obtained by searching a stove in a locked kitchen in the dungeon below the Observatory. The kitchen can be accessed by killing the goblin guard nearby and then using the goblin kitchen key on the gate.
The player must give the mould to the observatory professor along with a piece of molten glass in order to make a new lens for the telescope. The professor will be unable to make the lens and will instead return the mould and glass so the player can make it.