ABOUT 20 people will lose their jobs at the Mandalay Resources mine in Costerfield, with future decline mining outsourced from next year.
General manager Andre Booyzen said the strategic decision came after an assessment of future production.
The company also announced it will stop ongoing mining of its underground decline for a period for four months.
Mr Booyzen said Costerfield Operations had now accessed all areas required for ore production for the 2014 financial year and early 2015 production.
"The mining rates towards the new Cuffley ore body were completed well in excess of anticipated rates," he said.
"Ore production and processing rates will not be negatively impacted and will be maintained at current levels."