The show must go on, right?

Well-wishers may tell you to break a leg, but that doesn't prepare you for having your arms lopped off.

Taseko Mines (AMEX: TGB) stood upon the world's stage while awaiting final regulatory approval for its Prosperity copper and gold mine, but when the curtain closed, the performance was jeered with scathing reviews.

Canada's Environment Minister, Jim Prentice, dealt a crushing blow to Taseko on Tuesday when he announced his government's negative permitting decision for Prosperity. While this may not mark the absolute end of the road for the project, this decision significantly extends a process that has already reached an epic 17-year duration. During after-hours trading, Taseko shares plummeted by nearly 30% to trade for less than $4.60 per share.

Taking his cue from the report of a federal review panel issued back in July -- which Prentice characterized as "scathing" and "probably the most condemning report that I've seen" -- the decision hinged upon the risk that proposed post-project mitigation efforts might fail to adequately restore Fish Lake and the surrounding ecosystem. Taseko's mine plan, which envisioned converting Fish Lake into a tailings pond, had drawn vehement opposition from First Nations and environmentalists alike.

Taseko's best-case scenario
All Taseko can do at this stage is go back to the drawing board, engage in lengthy consultations with groups that opposed the plan, revise the mine plan in a way that addresses the key concerns of regulators and others, and submit that revised plan for another arduous review. The miner has found a key ally in British Columbia Premier Gordon Campbell, and the BC provincial government has already indicated it will work with the company to facilitate another permitting attempt.

The unspeakable scenarios
In the wake of this material setback, investors are forced to concede that a range of undesirable scenarios could now unfold that would block or significantly dilute the prosperity that shareholders have pined for.

The worst-case scenario that I can envision has Taseko spending additional capital for a revised mine plan, failing in that process once more, and then perhaps finding itself unable to monetize the asset at anything other than bargain-basement valuation. As it is, the property's notional value has been severely reduced by this negative decision, and a follow-on failure would tend to further dissuade potential bidders. In that extremely unsettling scenario, a larger, nearby producer like Teck Resources (NYSE: TCK) could find itself in a position to swoop in to acquire the property for a pittance.

Under those (or similar) circumstances, fair value for Taseko's shares would essentially revert back to fair value for the flagship Gibraltar mine. Thankfully, we have a strong reference point for determining approximately where that value may lie. Fools may recall that Taseko sold a 25% stake in Gibraltar for $170 million last December to a subsidiary of Japanese trading house Sojitz.

Taseko's remaining 75% stake, therefore, carried a realized market value of $510 million nearly one year ago. Since that time, the company has continued to invest generously in the Gibraltar operation, placing the finishing touches upon a four-year, $300 million expansion initiative. Most recently, these efforts featured the construction of a new SAG mill direct feed system and the procurement of two new Bucyrus (Nasdaq: BUCY) shovels. These improvements are finally yielding meaningful production growth, with Gibraltar raising copper production by nearly 28% sequentially to 25.7 million pounds for the third quarter. Molybdenum production surged 37% to 265,000 pounds.

Copper prices have also shown persistent strength since that time, offering context for the stock performance of miners Southern Copper (NYSE: SCCO) and Freeport-McMoRan Copper & Gold (NYSE: FCX). Bundling all of these considerations together, I find myself honing in upon a fair value for Taseko's 75% stake in Gibraltar in the range of $660 million to $675 million. Adding in Taseko's net cash position, I believe that Taseko's shares could still justify a price near $4.50 in the sorts of worst-case scenarios where Prosperity is essentially removed from the valuation equation.

What brought you here?
How investors grapple with their deliberations over this stock in the near term is likely to correspond to the source of their initial interest. If Gibraltar was your primary focal point, and you share my forecast for strong earnings performance when Taseko reports next Wednesday, then you might be inclined to stick around and enjoy the results of that $300 million mine expansion.

For those who came to Taseko primarily for a chance at Prosperity (seeking meaningful exposure to gold within the play), it pains me to suggest that it may be time to move on to greener pastures. Much shorter paths to prosperity now exist for Fools seeking bi-metallic exposure to gold and copper, including Ivanhoe Mines (NYSE: IVN) with its enormous Oyu Tolgoi project in Mongolia.

Although it has been demoted from five stars to four within our ratings system, Taseko enjoys a loyal and well-informed following within the Motley Fool CAPS community. To see how your fellow investors are reacting to this unfortunate development for the stock, visit the Taseko Mines CAPS page to review recent picks and pitches, and also add the ticker to your watchlist by clicking here.

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Freeport-McMoRan Copper & Gold and Taseko Mines. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.