Gems

Gems can be mined in veins rarely underground and are very valuable. Each gem colour can be used to create a Phaseblade of the matching colour, while Topaz are used in the Sandgun, Rubies for the the Gold Crown and the Robe, while each of the gems is used in creating one component of the Jungle Armour.

Gems are found mostly underground, inside Stone. Gems are scattered completely randomly, and the depth at which you dig has no effect on what rarity of gem you find. You are as likely to find diamond 300 blocks underground as you are 2700 blocks underground.

Phaseblades
Gems can be used to craft Phaseblades:

Other Recipes
Some gems can be used in the crafting of individual items:
 * Topaz: Sandgun
 * Ruby: Gold Crown