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The Gold Pan is the simplest way of getting Sifted Ore, an item which can be used in an Ore Washer to get different types of dusts. To use it, right click it on a piece of gravel. The gravel block will disappear, and a piece of Flint, Clay, or Sifted Ore will drop on it's location.
A very good way of finding gravel is by going in an ocean, while being equipped with a Scuba Helmet and a pair of boots enchanted with Depth Strider.