You equip this item instead of your weapon and go to Tarkan. There will be some colored stones on the ground where you can use this pickaxe to mine gems. However, its durability will decrease until it breaks completely, without being able to restore. In addition, when trying to mine gems, it is possible that you will fail the multiplier. The more you mine, the more likely it is to fail. Each color represents a type of gem.
I don't remember if this gem mining mechanism is already available in the new version (HD).