I really like it altho i think 10 flakes on 1 bar is a bit to much considering it only has a small chance of succeeding and you use quite a lot of materials on it.
What i would sugest is make the ratio 1 bar to 3 “flakes” and make the chance of getting a “flake” about 25%.
This means that you need an avarage of 60 silver ore, 12 wood and 27 coal to make 1 mithril bar
And i would say dont make it flakes but make it nuggets 
. I use nuggest myself as well and if you want you can use the base model for it.
I really like the idea of having to gamble your silver to get the mitrhil bars!