After perusing the FTB wiki it appears koboldite has very little worth other than making a pickaxe, some sort of statue and an altar upgrade. it is gained by trading small koboldite dusts with hobgoblins to receive koboldite nuggets that can be crafted into ingots. Said small dusts are gathered by enslaved hobgoblins it would seem.
The pickaxe itself is an unusual recipe involving buckets of lava.
I don’t think the material is is meant to be smeltable, at least it doesn’t seem so based on what i’ve read.
As for the silver dusts, they are gained by smelting gold ore in a furnace over a silver vat. I guess this could be considered an exploit though if the gold is consumed it would more likely be considered exchange. (no strikethrough?)
Edit - My mistake it would seem you smelt gold ore in a furnace to receive silver deposits in the silver vat which would make it more of a byproduct as you would still be receiving the gold I’m guessing. Though I don’t think you can smelt gold in a furnace with Gregtech so i’m wondering if this actually works.
Tell me this, are you able to construct the bone needle? I’m wondering if there may be some underlying bug I haven’t taken into account that isn’t related to Gregtech.