Katoro Gold PLC shares dropped over 20% in the early hours of March 20 in London after the company decided to suspend ongoing feasibility work at its Imweru gold project in Tanzania to assess project economics in the wake of new mining legislation in the country.

The Imweru gold project forms part of the company's Lake Victoria property in Tanzania.

Katoro expects to complete the assessment process, which will be based on preliminary pre-feasibility results and the new mining legislation in Tanzania, by the end of the second quarter or early in the third quarter.

The company is also considering further exploration work to expand the existing resource at Imweru, where Katoro has only explored 50% of the area.

Katoro had been aiming to bring Imweru into production on an expedited basis to generate sufficient revenues to self-fund the further development and expansion of the Imweru and Lubando gold projects.

"Having considered the preliminary findings of the pre-feasibility work, as well as the impact of the recent updates to the mining regulations in Tanzania, we have decided to first assess the current economic viability of Imweru to determine whether we should continue with the present development strategy or whether an adjustment is required, to ensure optimal utilization of resources and realization of the full potential of the Imweru/Lubando gold projects," Katoro Executive Chairman Louis Coetzee said.

The company submitted a mining license application for Imweru in September 2017.