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I think my problem is I have always played Strategic war games that have weapon strength, windage, Terrain ect but I have very little exp with magic (other than neverwinter Nights, Icewind Dale ect and then I still didn't play the Mage).
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I think that your questions are very interesting because there is a lot that people on this forum take for granted. Like boosters working only with mages having at least one in the corresponding path.
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But what do I DO with the hammer?
Once I Forge it SOMEONE in my army must use it to make it work....right?
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Hammer reduces the cost of forging items (as said above). If you've read the different guides you know that labs enable mages to make magic items. Whenever you want to make a magic item, you just pick up the mage with the right bath to forge the item and select it from the list. The right way to use the hammer(s) is therefore to equip it to the mage(s) that makes the most expensive magic item(s) for this current turn. Otherwise it works just like a normal item creation.
Hum, and I have to says something else : when choosing the items the full cost is shown and not the reduced cost. A thristle mace is shown as costing 10 nature gem even if you have the hammer in hand. However, when you "validate" the item (with the hammer in hand), only 7 gems will be deducted from your vaults and not 10.
The same is true of the other 'school' magic site, the reduction in cost is not shown. But it does work.