The Endeavour Mine will soon have 80 per cent of its production cut, resulting in redundancy for 116 positions out of 170 positions employed by CBH Resources.
Annual production levels at the Cobar-located mine will reduce from 64,000 tonnes of zinc and lead last year to a guidance of 11,000 tonnes in the 2016-17 financial year.
The company will also undergo a salary freeze.
Company director Visko Silicich said the decision was based on historically low commodity prices, and would be reversed when market conditions improved.
The trick will be, of course, to understand exactly when that price recovery will occur," Sulicich said.
"Our issue at Endeavour is simply that we've only got two to three years of reserves left at what was our previous production rate, so we believe it's prudent to preserve that reserve until prices recover.
"We're one of the four or five decent players in the district, so it has an impact on the Cobar community.
"We're mindful of that, but we're also thinking about how we can best optimise employment and production in the future."