The third orc is engrossed in his smithing and unlikely to notice you until you attack him or enter the light of his forge, so use this to close the distance if you haven't already had to fight him. The forge, happily, also has a smelter and a workbench- but no tanning rack or grindstone (the tanning rack makes sense, but no grindstone? Odd.). There is also some equipment on the table by the forge if you feel like grabbing that. Before you enter the mine, have a look around- the smith apparently lives up here, and his shelter includes a chest with his valuables in it, as well as some food on a table set on a small deck overlooking the rest of the mining camp.
Roll the cart by the smelter for its orichalcum ore, and make sure you've snagged everything you like. Then be sure to save before you enter the mine.
The mine is short and small, and shouldn't give you any trouble to locate anything in it. Unfortunately, it also doesn't give the bandit leader any trouble locating you, as he spends all his time in here mining, patrolling- even his sleeping bag is in here. Even stealthy people will have trouble, as he's likely to walk across you if you ever hold still. What's more, several of the hanging-bone noise traps are lurking around, making things even more difficult.
As if that weren't enough, the bandit leader here is powerful. He wields an enchanted two-handed axe that will murder you very quickly with fire, and his own health is immense. He doesn't run out of Stamina quickly or easily either, so be prepared for a very tough fight. He's also tough enough that even the sneakiest sneaky types can't easily Backstab him to death, so expect to get hit at least once. Backing away as you fight him can help, but the mine is very small and cramped, and the walls are uneven and lined with clutter, so it can be very difficult to avoid trapping yourself as you face off with him. Take as much advantage as you can of his low speed (thanks to his heavy armor) and with a little luck you can overcome him- or with a follower and a high level.
Help yourself to his stash of loot, including a book that will give a level to your Armorsmithing skill, and the ore in the mine, and you're done.