Lime treatment of acid mine drainage (AMD) generates sludge that is commonly stored in ponds for dewatering. The use of soil-aged sludge-based mixtures for mine site rehabilitation can allow the emptying of existing basins, thus extending their storage capacity, reducing the volume of the borrow soil pit required for mine site rehabilitation, and consequently reducing the mine footprint. The authors investigated the geotechnical properties of silty soil–sludge mixtures (SSMs) as possible components of covers with capillary barrier effects (CCBEs) to prevent AMD generation from mine waste. SSMs with β values of 10%, 15%, 20%, and 25% sludge (β = wet sludge mass / wet soil mass) were studied. Two water contents were considered for each of the mixture components: 175% and 200% for the sludge and 7.5% and 12.5% for the soil. Results indicate that saturated hydraulic conductivity (ksat) values were in the range of 10−5cm/s for the soil and SSMs at void ratios ranging from 0.28 to 0.53, with values decreasing slightly when β was increased from 0% to 25%. The air-entry value (AEV) increased from 20 kPa for the soil alone to 35 kPa for the SSM with β = 25%. These values of ksatand AEV are comparable to those of materials used in the moisture retention layers of existing efficient CCBEs. However, the volumetric shrinkage increased from about 2% for the soil alone to values ranging between 24% and 32% for the SSM with β = 25%, depending on the initial water contents of the components. Tools are provided to estimate to which extent the use of sludge in SSMs can reduce the volume of borrow natural soil required for a moisture retention layer of a CCBE.