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I'm not sure if a trader would run around with a pickaxe but then again he's a dwarf. If that's his preferred weapon it's no wonder he got captured.
Whatever, we're not stealing anything from our questgiver. Show them the pickaxe and we'll see. It's like Aesop's fable of the Honest Woodcutter
https://en.wikipedia.org/wiki/The_Honest_Woodcutter
Did you lose this golden pickaxe in the goblin cave?