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The answer is "sort of". Many (perhaps most) metals will oxydize. Iron oxide is what you normally know as rust. Aluminum oxide is what happens to the surface of untreated aluminum. Lead oxide is a grey powdery substance that will form on the surface of uncoated lead.
If what you are seeing is grey lead oxide, then the melting process will take care of that. If you are seeing some other color then you have some impure lead and it is the other impurities that are giving it the color.
As to suitablitiy for casting, I'll let the experts answer that.
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