Alamos Gold raised its half yearly dividend by 40 percent, the third increase since its first payout in 2010 amid skyrocketing gold prices.

The Canadian gold miner raised its dividend to 7 cents a share from 5 cents a share, payable on October 28 to shareholders of record on October 14.

Alamos has more than doubled its dividend since it announced its first in March 2010.

Meanwhile, the company also expects Escondida project production, scheduled to begin in 2012, to be at a cash cost of $200 an ounce and sees the high-grade gold adding significantly to its Mexican operations.

Gold remains one of this year's best-performing commodities with 27 percent rise since January. Gold currently trade above $1,800 an ounce.

This production growth is expected to generate tremendous cash flow margins at current gold prices, Chief Executive John McCluskey said in a statement.

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