The Zalcano shard is an item dropped by Zalcano. It can be used on the dragon pickaxe to create the dragon pickaxe (or), which alters its appearance. It is solely a cosmetic upgrade and does not change the stats.
The shard is the second cosmetic add-on for the dragon pickaxe, after the dragon pickaxe upgrade kit. However, unlike the upgrade kit, it will not be destroyed should players revert the dragon pickaxe to its regular appearance.
For an exhaustive list of all known sources for this item, see here