It is an enchanted smithing hammer that Charsi left behind when she fled the Rogue Monastery. When the forces of Andariel took control the Monastery, the Malus was entrusted to The Smith in the Barracks.
The Horadric Malus is a thoroughly unremarkable as a weapon, and is much better used to complete the quest.
One-Hand Damage: 6 To 16
Required Strength: 16
Required Dexterity: 16
Mace Class - Slow Attack Speed
The Rogue Monastery served as temple, military headquarters and home for the Sisters of the Sightless Eye for generations. It was here that the Rogues gathered in times of peace to train and in times of war to utilize that training.
When their union dissolved, this Horadric Malus was entrusted to the Sisterhood guarding the pass into the East.