The gilded iron pickaxe is a decorative iron pickaxe that has been gilded by the Liquid Gold Nymph. If a player has been awarded all of the pieces of the golden mining suit, when the nymph appears she will offer the player Miningexperience or she will gild any one of the pickaxes a player has on them. Foreman Jaak can remove the gilding from any pickaxe if asked. Gilded pickaxes are merely cosmetic and provide no additional bonuses.
When the Nymph appears, you will be given the option to gild the pick in your inventory or tool belt, essentially signalling that it is possible to add any gilded pick to the tool belt.