The Endeavor Mine at Cobar will shed almost two-thirds of its workforce as it drastically cuts production.
Owner CBH Resources on Wednesday announced the move that would reduce the team by 130 people to 71 people.
"Following a review of operating strategies at its Endeavor Mine in Cobar, CBH is today announcing a cut in production and a reduction in its current workforce," chief operating officer Visko Sulicich said.
"This comes as a result of on-going cash losses through 2019 as the orebody comes towards the end of its current reserve."
Production would be reduced to a minimum level of about 17,000t per month for the remainder of 2019 while at the same time partially completing infill drilling of the inferred Deep Zinc Lode Resource to better appraise its future viability, Mr Sulicich said.
The current workforce of 161 fulltime CBH employees plus 40 contractors would be cut by 130 people to a level of 71 people.
"This decision has not been taken lightly," Mr Sulicich said.
"In the coming days we will consult with all our employees and put in place support services to assist people who are affected as a result of these changes."
In February 2016 the operation's working population of 176 was reduced to a skeleton staff of just 60.
More to come.