H&E staining is not able to specifically distinguish melanin from surrounding tissue, which is why a stain such as Fontana Masson might be used. The Fontana Masson stain is used to demonstrate argentaffinic substances, most often melanin, but also argentaffin granules, which are found in carcinoid tumors, in the digestive tract or lung.
In an argentaffin reaction, ionic silver is reduced to metallic silver, depositing metallic silver at the reduction site. The cells being stained are able to act as their own reducing agent during the reaction, without the need to add a separate additional reducing substance, such as formaldehyde or hydroquinone. This is opposed to an argyrophilic reaction, in which the cells are able to absorb the silver ions but require the reducing agent for the silver to be converted into elemental silver. Learn more about types of silver staining in this post.
In the Fontana Masson stain, the melanin reduces the ammoniacal silver nitrate to metallic silver, resulting in black deposits. A counterstain is generally used, such as nuclear fast red, which will produce a pink/red background for the black melanin. Fontana Masson, though used over H&E for melanin detection, as previously mentioned can also demonstrate other argentaffinic substances, so it is not specific to melanin.
Another limitation of the Fontana Masson stain is that it does not allow for effective evaluation of the cell morphology, making it difficult to make a specific diagnosis based off of the Fontana Masson stain alone.
Fontana Masson’s melanin detection has applications outside of skin cancer diagnosis. It has also been studied for use in differentiating Cryptococcus neoformans from other fungus because of the presence of melanin in the cell wall. Cryptococcus neoformans is a rare fungal infection typically seen in immunocompromised patients, such as those suffering from AIDS.
https://www.sciencedirect.com/topics/medicine-and-dentistry/argentaffin-cell
http://www.ihcworld.com/_protocols/special_stains/fontana_masson.htm
https://www.scielo.br/j/rimtsp/a/TFkNhmTKCHqYX3QpqZMXN7G/?lang=en
https://www.ijpmonline.org/article.asp?issn=0377-4929;year=2014;volume=57;issue=2;spage=217;epage=222;aulast=Sundaram