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It is not 100 -50 -50 but 100*0.5*05. And it never ever drops below 1 gem in all paths involved.
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Well the forge of the ancients is certanly a seperate halving before the others but a master smith ADDS his bonus to that of the item he is using - 75 % with the hammer of the dwarfen lords for example so this is certainly worth speculating about!
Pickles
(Hmm if only I could get a Cyclops hammer to go with my smiths & hammers & forge)