Prospecting allows one to find the location of ore hidden underground.
How to Prospect
To use, equip either a Woo-Woo-Wand or Dowsing Rods and toggle the skill in the Adventure Menu (V), Prospect (P). While active, a floating arrow appears above the characters head and will bounce around much like a compass needle trying to point north. It can go from bouncing randomly around to more stabilized direction. Direction is merely orientational, and once we walk close to an ore spot it will be marked as brown circular patch of ground with black lines covering it.
I have found that the easiest thing to do is to use the regular Woo-Woo-Wand and zoom your camera out far and just wander around in a sort of large expanding circular pattern around the location you desire the metal node ignoring the directional arrows over your head. I have seen metal nodes appear on the ground a very good distance from my character's position, indicating the range is quite high.
Apparently the whole map is filled with mine nodes, the purity of the ores is what makes it hard to find a node in a specific location, it is way harder to find high purity nodes than lower purity ones
As of the "Nickels and Dimes" update (25-4-2013) , mine nodes have now split into two types, differentiated only by the color of the node on the ground when prospecting and the result of their respective Ore when smelted. Copper nodes seem to have been found predominantly, if not only, with Dowsing Rods, with most people that tried Woo-Woo-Wand reporting no luck in finding Copper nodes.