When you approach Baal Tondral he will talk about how your heart yearns for the truth and freedom from the lies of the ore barons (etc. etc. etc.). When he's finished preaching ask him if you can talk to him, and then ask him about loyalty. He asks you to find a new initiate.
To do this, head back near the entrance and find Melvin. He's a digger, so should be easy to spot. Talk to him until he mentions his friend, Dusty. Head on back to the Old Camp and convince Dusty to join you. Since he's leaving you might as well help him clean out his hut! The combination to his chest is R L L L and it contains 34 Ore, 3 Coins and 1 Razor. Once Dusty is gone this gives you a second home in the Old Camp.
Dusty explains that he can't leave the camp because the guards know he wants to, but he might be able to if they were bribed. He says only those at the south gate can be bribed. Head there. Say you're out for a stroll. With your 100 Ore in his pocket, the guard will suffer from a memory lapse.
Anyway, lead him back to the Sect Camp and dump him in front of Baal Tondral, who will be suitably impressed.