The lantern is given to you by the head monk in the mountaintop monastery in the Himalayas. You will need the matches from the Pub at Loch Ness to light it.
On Cryptids, you go to the Himalayas and ask for the Yeti skull. He will not give you it, but you will be handed a lantern to 'light your way' as he claims.
There are matches on the bar in the pub at Loch Ness. You need them to light the lantern from the Himalayas when you are on the motorcycle in New Jersey.
You need the lantern from the Himalayas, and the matches from Loch Ness, so that you can travel in the dark forest at New Jersey.
Not a stick, not a candle. You get a reliable lantern from the monastery in the Himalayas. In the woods, use the matches from the Loch Ness pub to light the lantern so that you can "look around" (blue circle on motorcycle view).
You need the lantern in the dark woods of New Jersey. You will need the matches from the pub in Loch Ness to light it. (see related question)
The Pub is to the right at Loch Ness. You can get tickets for the rowboat and submarine rides by beating the dart players there. You will also find the matches you need for the lantern you get in the Himalayas.
At the monastery in the Himalayas. You also need the matches from the pub at Loch Ness.
On the end of the bar. Get the lantern from the Himalayas and when you go to New Jersey, use the matches and the lantern will light, allowing you to go to the deserted house in the woods.
When you have the matches from the Pub, they don't do anything until you have the camping lantern from the monastery in the Himalayas. Once you have the lantern, using the matches lights the lantern, and it doesn't matter when you do it. The lantern will automatically appear when you are in the dark.
There are matches in the Pub at Loch Ness. Go right from the loch and they are on the bar in the Pub. You will need them for the lantern you get in the Himalayas.
You USE the matches from your item bag. The matches are used to light the Lantern that you get from the monastery in the Himalayas. You need the lantern to go through the dark forest in New Jersey.
Go back to the Himalayas, and now you can climb a rope at the right side (above the helicopter), and go back to the monastery for the lantern.