Gold only found in cold biomes, hellz yes! The dirt in cold biomes should be frozen, permafrost! That is why he had to warm up the dirt with a fire, maybe we could do the same to make it easier to dig in cold biomes. Otherwise you just get like half the dirt or something like that (depending on your skill of course) from using a shovel. People would have to struggle to get gold just because it's dang cold there. Water should be frozen in these biomes also which you would have to break in order to get water or to do some fishing.
So like 5 ideas there which would be great together.
I would like big chunks of gold to be generated with the world (I want to find big fist sized chunks on a rare occasion), but yeah small flakes of gold could spawn while you sluice gravel. The amount of gold flake you get depends on your sluicing skill (which works like how Quezax described skills, which I love). Then you melt it down to get a gold bar. From there you craft, and maybe are left with parts of a gold bar. I don't think a whole gold bar should be required to craft say.. a ring. Maybe just 1/4 or something like that.
Off topic a bit, I sure hope that if you remove snow in cold biomes that it comes back somehow, like if you dig a hole or whatever. And snow should totally cover up small holes.
About digging through a mountain. Well people will strip mine anyways.. it will happen. But I hear ya. The gold flake spawning while you sluice will reduce this, at least near the surface since that is where you find gold. We have to accept that the beautiful world will be destroyed in places. But this is good, it mirrors humans affect on the world...
I don't think sluicing should be totally automated, like you can walk away from it and come back later to a pile of gold flake. Maybe the sluicing could be mechanized but you still need to dig with a shovel to get the gravel and dump it in the machine, plus maintain the water supply with your pipes and pumps, power which will need fixing etc... Then manually collect the gold flake after. At this point it would be interesting if you needed to have good skill for using machines also, so the sluicing skill combines with this which would increase the amount of gold flake you get which is realistic since the machine will help you get more. (So yes I'm suggesting we have a Use Machines skill which levels...).
Gold panning progression: Gold panning by hand, simple wooden sluice box (which deteriorates fast), improved metal sluice box(same one Meltron linked but different image, improved durability), first mechanized sluice box (which is just an addition to the metal sluice box but needs piping, pump and electricity), ultimate sluicing machine which one person could use (full unit on wheels which is like a trailer so you need a vehicle to tow it, plus pipes, pump, electricity and a motor, belts, tumbler etc.. not an easy thing to make for sure).
I know that seems crazy by I think it's doable and it would be freak'n great! I don't know of any game that has anything like this in order to have an economy. It doesn't have to be like little rocks being animated or whatever. Keep it simple and basic in regards to moving parts or whatever. Would be cool if the last one had the tumbler rotate.. other than that it's all about the water flowing!
I think the ore stuff has been figured out, at least within the community haha. Not sure what the devs want to do in regards to getting ores into the game. Everyone should know by now that I hope for stone types and ores to be in layers, not pockets... haha
Good stuff on the gold panning though!