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Katoro Gold shares drop 20% after work suspended in Tanzania
Shares in Katoro Gold tumbled on Tuesday after the gold exploration and development company announced it is assessing the economic viability of its Imweru Project.
The Tanzanian project is currently undergoing an economic feasibility assessment due to preliminary results and new mining legislation and regulation in Tanzania which could cause licencing delays, with the assessment projected to finish at the end of Q2 or the start of Q3.
All other ongoing feasibility work at the site has been suspended until a final decision can be reached.
Louis Coetzee, executive chairman of Katoro Gold PLC, said: "Naturally, this will delay our planned timetable to production, but the fact remains that we are currently at a stage of the feasibility study where we need to make critical strategic decisions that will determine the success or failure of the Imweru gold project and we therefore need to ensure that we take these decisions responsibly," said Coetzee.
The company's board has approved a strategy to identify and evaluate additional projects to diversify its asset portfolio.
To this end, the company has a cash position of approximately £540,000 which Katoro said will enable it to "continue with the execution of its strategy and work programmes".
As of 1119 GMT, Katoro Gold PLC's shares were down 19.23% at 1.05p.