"Everybody's got the seam of goodness in them, Kit" said Grandpa. "Just a matter of whether it can be found and brought out into the light."
The majority of Grandpa's conversations with his grandson are peppered with references and motifs connected to mining. Grandpa's life has existed in literal darkness a lot of the time, because he spent his working life under the ground. When Kit is beginning to question Askew, his motives and the way in which he acts, his grandfather reminds him that everyone has good and bad in them. The game Death is a negative influence on everyone who plays it and brings out the darkness in them. This is why Grandpa would be wholly opposed to it; Kit's character becomes noticeably darker when he is playing the game of Death; when he manages to stop Askew playing it too, not only does he become a nicer boy, but his formerly abusive father also changes his colors and the light is brought out of him as well.
"Look at the earth and you think it's solid," he said. "But look deeper and you'll see it's riddled with tunnels. A warren. A labyrinth."
The ground beneath your feet can sometimes look like a floor. You can did a little hole in the dirt, but it seems to be just that - a hole, that goes straight downwards, in the shape that you dug it. It's not connected to anything. Grandpa is trying to explain to Kit that in fact, there is a whole world going on under the ground. The earth is not a solid at all, and there is a community under the ground that is complex and has provided him with a living for a very long time.
He is also explaining in this quote how dangerous it is for the kids to be playing or meeting up in the old mine shafts. There are no maps or directions; they could get lost and nobody would be able to find them again. The mine is incredibly magnetic to Askew and he is drawn into it for precisely that reason; it is a dark, sprawling underworld where he feels far more at home than he does above the ground.