Junior gold player Manas Resources has ended a deal to buy a gold project in Tanzania due to continued uncertainty and a lack of progress.

A year after striking the deal to buy the Victoria gold project, Manas was no closer to completing the transfer of licences due to restrictions currently in place in Tanzania.

This has potentially cost the company (ASX:MSR) $US800,000 ($1.1 million) if it cannot help the seller find a new buyer for the project.

Investors weren’t impressed, sending shares down 20 per cent to 0.4c in Friday morning trade.

Several regulatory moves by the Tanzanian government in the past couple of years has created uncertainty for ASX-listed miners active in the east African country.

CEO Philip Reese told Stockhead the delays “significantly changed” the value of the deal.

“By the time we got to the end it basically didn’t carry the value we had when we went into it because of where Tanzania sits now,” he said.

“We made a decision that we’re better off focusing our energy in West Africa.”

Manas Resources (ASX:MSR) shares over the past year.
Manas Resources (ASX:MSR) shares over the past year.

Manas has ruled out further deals in Tanzania in the short term and is focusing its efforts on advancing its Mbengué gold project in Northern Côte d’Ivoire.

The company can recoup the $US800,000 pre-payment made if the vendor on-sells the Victoria gold project within the next 12 months.

But Manas isn’t holding its breath.

“Given the situation in Tanzania I guess we took a view some time ago that if the deal didn’t proceed it’s going to be tough to recover that money,” Mr Reese said.

“If they can find another buyer then that’s great and we’ll certainly help them do that. There’s no animosity from us in terms of where things ended up, it’s just we couldn’t see a way forward.”

Manas already made provision in its 2017 financial report for an impairment if it cannot recover the funds.