UPDATE 1-Minefinders finds new mineralized zone at Mexico mine

* Says core drilling campaign will be started in the quarter

* Mineralized area seen extending over 600 m of strike length

Aug 19 (Reuters) - Canada's Minefinders Corp Ltd (MFL.TO) said on Thursday it discovered a new mineralized zone at its Dolores mine in northern Mexico.

"The initial drill results are encouraging and demonstrate the presence of a well mineralized area extending over 600 meters of strike length," Chief Executive Mark Bailey said in a statement.

The precious metals mining and exploration company, which sees potential for higher-grade gold and silver mineralization, said a core drilling campaign will be started in the quarter to test the deeper potential of the North Dome target.

The Dolores mine is located in the Sierra Madre occidental range of northern Mexico and has a deposit and an open-pit mine life of 15.5 years.

Shares of Vancouver, British Columbia-based Minefinders, which expects 2010 gold production and sale of about 91,000 to 100,500 ounces, were up 14 Canadian cents at C$9.39 Thursday morning on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Jarshad Kakkrakandy)