Recent drilling results did not improve on historical assays from the area and gold assays were low.
In addition, the geological interpretation of the project has changed with the recognition of two thrust faults which cut the mineralisation off at depth, it said.
Tethyan recently took an option over the Suva Ruda project also in Serbia.
Through the option Tethyan, which changed its name from Aurasian Minerals in July, can purchase 100% of the licence, or alternatively buy its current owner Deep Research, for €6mln cash plus mine construction costs.
Peter Mullens, chief executive, said: "Tethyan is committed to exploring for gold and base metals within the Balkans and we plan to focus our resources on projects which can deliver the highest return to shareholders".