I got curious about this so I did a little test. I checked the cost of forging mage bane (40 earth gems) with forge of the ancients active.
Using a mage without forge bonus: 20 gems. (1/2 price)
Ulm black priest (forge bonus 25): 15 gems (3/8 price)
Black priest + dwarven hammer (bonus 50): 10 gems (1/4 price)
Black priest + hammer of the forge lord (bonus 75): 5 (1/8 price)
Forge bonuses seems to be additive, forge of the ancients halves the cost after forge bonuses. You would pay 10 gems for a ring of wizardry.
Now someone just needs to get a nataraja equipped with the hammer of the forge lord and the hammer of the cyclops(?) that you need to wish for unless you find and kill the special independant leader that have it. You should be able to forge any item for 1gold that way
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What if there's a 20% construction bonus as well?
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I think that only works for spells and not forging items, but I have not tried.