This is the procedure for extracting and repacking of tinycore.gz file. I think same may apply to core.gz.
Extracting tinycore.gz :
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mkdir /tmp/temp
Copy tinycore.gz to /tmp , then
cd /tmp/temp
zcat /tmp/tinycore.gz | sudo cpio -i -H newc -d >/dev/null
Remaster/make changes to the extracted tinycore.gz which must be now somewhere under /tmp.
re-packing tinycore.gz from remastered version:
Delete /tmp/tinycore.gz , then
cd /tmp/temp
sudo sh -c "find . | cpio -o -H newc | gzip -2" > /tmp/tinycore.gz
Note: Use sudo where-ever required. Also there is good explanation in Remastring section of Wiki and the Forum's posts.
Posted on the request of a newbee. Hope this helps to others also.