From The Ultimate Book of Kid Concoctions
1/2 c white glue
2 c rock salt
6-8 drops food coloring
1. Mix rock salt and food coloring together. Add glue and continue mixing for 2-3 minutes.
2. Mold and sculpt Jewel & Gem Goop, using your hands.
3. Place Jewel & Gem sculptures on a piece of cardboard to dry. Drying time will vary depending on size and thickness of your creation.
I haven't made this yet, but I found this blog where someone else has.