(You don't seem to have sent your General out with your forces. Not sure if this was a mistake or not. Also, you can only use two stone in a settlement group, not three.)
The Zefie Battalion marches south to engage the orcs. The charioteers are unable to traverse the mountain, and have to detour through the western mountain pass, but they're fast enough to catch up with the infantry and scouts anyway. As they approach the orcs' territory, two units of orcish berzerkers wielding menacing two-handed swords arrive to meet them in battle. They charge with a howling war cry, and the Zefie regulars and cavalry move to engage them. The scouts hang back and pepper the approaching berzerkers with arrows, but do little damage, and then the chariots and berzerkers crash into each other in a bloody snarl of iron and gore. The zefie infantry closes a moment later, and the battle is joined. Meanwhile, a stealthily hidden group of orcs ambushes the scouts in the rear, tying them down and preventing them from supporting the rest of the battle. The scouts suffer heavy casualties and flee the battle quickly. The orcish berzerkers are poorly armored but extremely vicious. They tear the Zefie charioteers to pieces in minutes, but take so many casualties in the process that the regulars are able to dispatch the remainder with little effort. The ambushers briefly skirmish with the zefies still on the field, then melt away into the hills, leaving victory to the zefies.
The Zefie regulars march on towards the orcish settlement, finding the of the cavern it lies in, but the cavern mouth is heavily fortified, and a volley of arrows from atop the walls shows that they are expected. Not liking the prospects of a siege, and having orders not to pillage the countryside, they return to Fortress.
Things at home are less eventful. The city's iron and silver mines are expanded, and another group of settlers prepares to head out from the city. The city's researchers look into better methods of manufacture, and find several ways to improve the city's craftsmanship. Finally, one of the zefie scouts has developed a real knack for exploring new areas quicky, and has started leading his fellows on such expeditions.
New leader: Explorer!
Craftsmanship researched!
Produce Jewelers' workshops (2 wood or stone, 2 labor, Double jewelry production)
(And yes, your paperweights count, although I'm not sure how you make a paperweight out of gems the size of a pencil eraser.)
Military victory! +1 morale for 2 turns
Population drops to 21,179
Deep mines built!
Resources: What you said, except -1 wood, +1 stone
18+4 money collected, 7+4 spent