Ouray Silver Mines laid off roughly one-third of its employees this week, after problems with rockfall forced managers to take a step back from production.

On Nov. 13, mine CEO Brian Briggs decided to stop sending miners up one vertical section of the Revenue Virginius mine, called a raise, due to safety concerns. The rockfall, which happened two weeks ago, didn’t cause any injuries. But the shutdown after the rockfall meant there was less ore to process, triggering a domino effect on other...