# At this point you want to turn a bit more north. There is a small hump and just on the other side of the hump is a second, much larger lake.
# When you reach the second lake, follow the right-hand shore for about 5 minutes. You will see a very steep mountain ahead of you that looks like it's at the far side of the lake. Just keep following the right hand shore and eventually you will see sand and next to it the clay. This journey should take you 30-45 minutes.
(Thanks to PinkDiasy for the Directions)
# Once you find a clay tile, open your inventory and double-click your shovel to 'activate' it.
# With the shovel 'active', right-click on your clay tile and select 'dig'