For visualization purposes I would like to know what part of the valley does the 'mouth' refer to in English.
Taken from Sapkowski's "The Lady Of The Lake":
it lay right beside the mouth of the enchanted Cwm Pwcca valley
In English, the "mouth" of a river means essentially its ending, the furthest downstream part, where the river flows into some larger body of water such as a sea or a lake. Similarly, the mouth of a valley would be the furthest downstream part of the valley, where the valley ends (perhaps due to flattening out of the land rather than the river itself ending or flowing into something else).
But the story you're reading wasn't originally written in English ...
Firstly, it lay right beside the mouth of the enchanted Cwm Pwcca valley, permanently veiled in mist and famed for witchcraft and magical phenomena.
This (the full sentence that you've quoted part of) is just an English translation of the original Polish text:
Po pierwsze, leżało tuż obok gardzieli zaklętej doliny Cwm Pwcca, doliny tajemniczej, wiecznie otulonej mgłą, słynącej z czarów i zjawisk magicznych.
Word by word, "Po pierwsze" means firstly, "leżało" is the verb meaning it lay, "tuż obok" means next to, "zaklętej" means enchanted, "doliny" means valley, and we just need to interpret the word "gardzieli".
Literally, gardziel means throat, but it's also used to mean a gorge. It actually seems not to be the word most commonly used in Polish for the mouth of a river or valley, as that would be "ujście". On the other hand, Google Translate renders the whole phrase "leżało tuż obok gardzieli zaklętej doliny" as "it lay just beside the mouth of an enchanted valley", so it seems that "gardziel" can also be used for "mouth" in this context.
Anyway, even if a literal translation would be more like "it lay right beside the gorge of the enchanted Cwm Pwcca valley", in context we're talking about a lake, so the river must have flowed out of its valley/gorge to enter the lake, and it makes sense to say that the lake is near the mouth of the valley, i.e. the end of the valley.