Intensive livestock feed-lots have become more prevalent in recent years to help in meeting the predicted food production targets based on expected population growth. Effluent from these is stored in ponds, representing a potential concern for seepage and contamination of groundwater. Whilst previous literature suggests that effluent particulate can limit seepage adequately in combination with a clay liner, this research addresses potential concerns for sealing of ponds with low concentration fine and then evaluates this against proposed filter-cake based methodologies to describe and predict hydraulic reduction. Short soil cores were compacted to 98% of the maximum dry density and subject to ponded head percolation with unfiltered-sediment-reduced effluent, effluent filtered to <3 μm, and chemically synthesized effluent. Reduction in hydraulic conductivity was observed to be primarily due to the colloidal fraction of the effluent, with larger particulate fractions providing minimal further reduction. Pond sealing was shown to follow mathematical models of filter-cake formation, but without the formation of a physical seal on top of the soil surface. Management considerations based on the results are presented.