It only appears at the beginning of your 3rd year. It's at the bottom level of the mine near the hot spring, under the waterfall (level 255). It's in rocks so find it with a hammer, and you'll need an empty spot in the tools section of your rucksack to find it.
You have to use both save files, saving once before you go down and once as soon as you get on the next level. Then find the staircase, load the second save, go straight to where you found it the first time, dig it up, save over the first save, and go down. If you can't find the staircase, reload the first save and start over.
That'll get you to the bottom using only one or two Elli Leaves, if you have 8 or more Power Berries.
Uh....Yea.....Um Where Do I Get It. 
