wuyanei said:
How would you have ruled in this particular case?
How I would have ruled:
I would have allowed it, first, and second I would have stated specifically that it only mitigates the difference between leather and studded leather. I would also make it only cost 1/2 the "listed" amount... or 500GP.
Leather has a max dex of 6, and no armor penalty (AP). Studded leather a max dex of 5, and an AP of -1. Now, make that studded with mithril and you can remove the additional penalties that mithril imposed, but you can't get a max dex of higher than 6 on it, as it's still got a normal leather component.
Edit: Nonlethal already stated most of my point (I posted without reading first. I like to give my initial impression without being influenced sometimes).
Additionally, I like Pielorinho's attitude of "say yes" when you can. So when I can come up with a good justification for why and how, I'll do it. I think that indeed metal is a largish component of studded leather, it has to be. And if that metal adds to encumberance, weight, ASF, then mithril can be used to help offset that addition. It just can't offset that addition more than the original penalty. And since mithril composition offsets more than the metal in studded leather adds, I'd allow you to use it to make the armor and treat the armor statistically as if it were normal leather. Now, this is a pretty big thing, realistically speaking... I might go ahead and charge the full price of 1000 gold instead of 1/2 as I originally thought.