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CONGRATULATIONS to Senegal. It's just made it as one of the World Bank's top 10 pro-business reformers in 2008. The west African nation has some way to go - even with this year's gong, it still sits 149th on the rankings of the best countries in which to do business.

Garimpeiro's interest in Senegal is its position as a late starter in the west African gold production boom. And as luck would have it, Melbourne's own Mineral Deposits Ltd (MDL) is leading the Senegalese charge.

First production from MDL's Sabodala gold project is due by early January after the expenditure of some $US205 million ($A249 million) on capital equipment and $US60 million in drilling.

Production in calendar 2009 has been forecast at some 170,000 ounces of gold at a cost of less than $US400 an ounce. Based on MDL's hedge book (forwards and puts that will give a delivered price of $US861 an ounce compared with the current spot price of $US764 an ounce), cash flow in 2009 should approach $US80 million.

Current resources are about 2.7 million ounces but an upgrade to more than 3 million ounces is expected well before the first gold is poured, confirming an expected life for Sabodala of more than 10 years.

From all that, you would think that MDL has been sitting pretty in the market. Far from it; the group's shares have been beaten up something shocking. Even after Friday's 8¢ a share bounce to 60¢, MDL is down 55% on its starting point for the (calendar) year of $1.35 a share.

The fall can be put down to general market malaise, the retreat in US-dollar gold prices and, more recently, news that the US hedge fund Ospraie was winding up its biggest fund after heavy losses.

Ospraie is MDL's biggest shareholder with a 14.7% stake. Not all of its stake is in the affected fund but most - about 55 million MDL shares - is. Ospraie is no Opes Prime in terms of desperation selling, but there is little doubt that the Ospraie stake is seen to be overhanging the market in MDL shares.

MDL chairman Nic Limb