Have your ore in your rutsack, and then go into the blacksmith shop and then go to the right there is a person with purple hair, and then ask her to refine it. If she is not there then you will have to go to the graveyard (next to the church) and it will have a cut screen and you will meet her. then she will start to work at the blacksmith shop.
How do i refine ore? Harvest Moon: Tree of Tranquility ...
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