The Mystic Mountains are a set of mountains. It is unknown of where the exact location is or why they are considered "mystic".
Although there is very little known about these mountains, it is known that the caves deep within them were rich with jade. Many people must have known about this because mining camps were eventually set up inside the caves. However, one tale says that during Master Oogway's travels, he came upon a lost mining village hidden in these mountains. For unknown reasons, he was presented with a rare gift of a massive hunk of jade. Humble as the old master was, Oogway thought himself unworthy of such a gift and instead divided it among the villagers as a token of his respect. The remaining shell (later named the Jade Tortoise of Wisdom) was taken to the Jade Palace where it is now used in the Training Hall.