The Diablo Resources Ltd (ASX: DBO) share price has struggled to take off following its debut on the ASX this afternoon.
The company successfully raised $6.5 million at 20 cents per share to drive its gold-copper exploration activities.
At the time of writing, the Diablo share price is 17 cents, a fall of 15%.
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What does Diablo Resources do?
Diablo's portfolio comprises three gold-copper projects located in western United States.
The Devil's Canyon Project is prospective for gold and copper, located in Nevada.
Minor copper mining occurred within the project area during the 1950s and exploration activities around the region date back to 1987, testing for gold mineralisation. Diablo is currently modelling magnetic survey data and undergoing further mapping and sampling for Devil's Canyon prior to drilling later this year.
The Western Desert Project is located in western Utah, close to the Nevada border.
This is another prospective project for gold and copper mineralisation with a history of exploration activities. Diablo has identified a number of exploration targets and plans to undergo drilling activities in the second half of 2021.
Finally, the Lone Pine Project is considered prospective for gold, located in Idaho.
Gold was discovered in the project in 1882, with a majority of development work completed on the Lone Pine vein zone prior to 1907. During 2020, 11 diamond drill holes were completed, with all drill holes intersecting a mineralised gold zone.
In addition to drilling, the company advised that regional mapping and rock chip sampling was completed, identifying numerous other gold occurrences within the project area. Looking ahead, Diablo plans to undergo additional drill holes and airborne magnetic surveying for later in 2021.
Why the Diablo Resources share price fell flat
Not all initial public offerings are made equal.
Just an hour after Diablo's float, another exploration company by the name of Minerals 260 Limited (ASX: MI6) also made its ASX debut.
Unlike Diablo, the Minerals 260 share price rallied as high as 75 cents from a listing price of 50 cents per share. However, it has dropped back to 60 cents at the time of writing.
Minerals 260 attracted a much bigger audience, citing its IPO as 'oversubscribed' with almost 15 million shares trading hands at the time of writing.
By comparison, Diablo's current volume sits at around 5.2 million.
Furthermore, gold prices have remained stagnant since late last year. This has resulted in gold players underperforming the broader S&P/ASX 200 Index (ASX: XJO).
The lack of upside from gold in the past 12-months could be a factor weighing on the Diablo Resources share price.
What's next for Diablo Resources?
Diablo has a busy schedule consisting of preliminary exploration activities and drilling.
According to its prospectus, the company plans to allocate $1.935 million towards the Devil's Canyon Project, $2 million to the Western Desert Project, and $1.465 million to the Line Pine Project.
