I don't know for sure of this is on your side. When using a tool with the Smashing modifier, the Iguana Tweaks xp level won't go up.

Iguana Tweaks compatibility?

Yup, that souns like it! :D Yesterday I discovered that it dóes work when shoveling/hammering gravel and sand, so it's only the ore gravels (which I made harvestable with a shovel myself with IguanaTInkerTweaks).