Sapphire

Sapphires and Rubies are probably the rarest crafting materials in the game. They drop occassionally in the Underworld and the Fissure of Woe, but there have been reports of them found in other areas of the game too.

In the Prophecies Campaign, they seem to drop from any creature that can drop crafting material (see Drop rate for more information). The probability also seems to increase with the level of the creature, as such, parties killing Shadow Army units in the Fissure of Woe are more likely to come across a Sapphire or Ruby than parties killing Hulking Stone Elementals in Old Ascalon (both are confirmed to drop them).

In the Factions Campaign, they seem to drop from everything (because everything drops crafting materials). They have been recorded to drop at the lower end areas (Shing Jea Island) as well as the high end areas (I've had one drop from outside Altrumm Ruins in Arborstone (Explorable)

It is believed by most players that some future expansion will contain new armor sets, which will require these crafting materials. For this reason, some players like to hoard them.

Acquisition

 * Sapphires have an exceedingly low drop rate, but are believed to drop from every creature that can drop crafting materials.