CBH Resources has slashed a third of its workforce at Rasp Mine in Broken Hill.
Thirty-seven workers and 14 contractors were notified of the cuts this morning.
Managing director of CBH, Stephen Dennis, said the cuts have come on the back of a $17 million loss over the past six months, the ABC reported.
"That's a position that's clearly not sustainable," Dennis said.
"It's become more urgent as we've said today that we act and that we act quickly.
"We've got to address those problems and that's resulted in the action that you've seen taken today."
Rasp Mine is one of the oldest in the region, with the ordebody first discovered in the 1880s.
The mine was officially re-opened on 25 July 2012, with an expected production rate of 34,000 tonnes of zinc metal in concentrate, 28,000 tonnes of lead metal in concentrate, and 1.1 million ounces of silver in the lead concentrate.
However chief operating officer Visko Sulicich says subsidence caused by a fire 100 years ago has made it difficult to access the zinc, making the mine less profitable.
"When you lose that high-grade feed and you have to re-establish to access additional high-grade feed it puts the pressure on," he said.
"That's been the root cause of our problem and we need 12 to 15 months to stabilise things and get it back on track."