I managed to get it working, here's how.
I found that:
If it's in the cage it won't trigger the event.
I was holding it without the
and it didn't trigger.
When I used the
and gained the
, it triggered.
Not sure if that's all intentional, seems like you should be able to hand him the ore even if you don't have the ability... maybe I'd bugged it somehow before and it fixed itself somehow... if others have been able to hand it to him under the conditionas that seeemd to prevent me then it must have.
I also had a weird bug where my Knight was holding the cage but I couldn't remove anything from the it directly to his inventory, only pass it to another character. And giving the cage to another character didn't show the option to pass it to my Knight. I sent everything to the homestead, including the cage, and picked it back up. Fixed it. Could have had something to do with that.