Sept 7 (Reuters) - National Bank Financial raised its rating on San Gold Corp to "outperform" from "sector perform" as it expects lower costs and higher production growth for the Canadian company in 2014.

San Gold shares were up 13 percent at a month's high of 93 Canadian cents in late-morning trading on the Toronto Stock Exchange.

The company, which operates primarily in the Bissett area in the Canadian province of Manitoba, said in July it was restarting milling operations at its Rice Lake mining complex after a near month-long suspension due to a mechanical failure.

"The second-half operating costs will start to benefit from the increase in throughput," the brokerage said in a client note on Friday.

The company had earlier said it was confident about its gold production outlook of 95,000 ounces to 105,000 ounces for this year.

National Bank also raised its price traget on shares of San Gold to C$2.30 from C$1.50. (Reporting By Sandhya Vijayan in Bangalore; Editing by Maju Samuel)