What does the old man mean when he says that treasure is uncovered by the force of flowing water, and it is buried by the same currents, and...

The
quote is meant to emphasize the duality of everything.  It's reminiscent of a Yin and Yang style
of thought.  The flowing water is neither bad nor good.  It simply is, but it has the power or
ability to affect the world in ways that could be interpreted as positive or negative.  The
water has the ability to uncover the treasure and cover the treasure.  

The
story of the miner is the exact same illustration except the old man uses stones instead of
water.  In the story, a miner has been looking for a beautiful emerald for five years.  He is
ready to give up.  Out of frustration he throws a rock at another rock.  The second rock splits
open to reveal the emerald.  

But he had thrown it with
such force that it broke the stone it fell upon, and there, embedded in the broken stone, was
the most beautiful emerald in the world.

The story shows
how the emerald was hidden by rocks, and how it was revealed with rocks.  It shows a duality of
rocks. 

The point of both stories is the same.  The old man is emphasizing to
Santiago the importance of staying vigilant and watching out for the omens that will show him to
his treasure.  

In order to find the treasure, you will
have to follow the omens. God has prepared a path for everyone to follow. You just have to read
the omens that he left for you.