The story
Uncertain, first attested in reference to animals & people in Scotland and in reference to ore chunks in Australia. Possibly from southern English nug (“lump, block”) or Scottish knudge/nudge (“short, sturdy person or animal”) + -et (“forming diminutives”) or from rebracketed alteration of an ingot as a ni(n)got.
Etymology from Wiktionary, CC BY-SA 4.0.