I have never heard of Mountain Quartz and just looked it up, nothing.
There is only one Quartz, which you seem to have, just check the Mage Library for the recipe, remember you need the actual Spell to create a Rune.
I would not think WaterFist would be that good, I never have used it, nor would I waste a Rune on it.
You need some Cold spell like Ice Arrow (lowest Ice spell) or better.
As your walking up the Mountain to get to the Fire Dragon, imeadatly after you see the last place where you could fall off the mountain on your right, as the rock face starts is a kind of ramp you can walk up, this leads to his treasure and an overview of his pit.
So you can do your talk to him, run out and back up that ramp and shoot Ice Arrows at him from a safe location.
You can also summon a wolves to distract the dragon.