Instructions
Equip your Treasure Hunter character with Germinas Boots. These will help him jump higher.
Wander around the area between Mount Bervenia and Riovanes Castle until you enter a random battle.
Use the "Jump" ability to move the Treasure Hunter to the top of the volcano, where he should find the Materia Blade. A "Jump" level of at least four is needed to reach this location.
Kill off the enemies to end the battle after getting the Materia Blade. If you are unsuccessful in the attempt before dispatching all of the enemies, just walk around some more to start another random battle. Repeat until you have secured the blade.