heidi jo,
I agree with Mark to use the �sludge� only on the back side of the dam � if at all.

As you know, the mud (bentonite) you are talking about is primarily used as a drilling fluid to circulate the drill bit cuttings to the surface.
Chemical additives are constantly added and changed to control the viscosity of the drilling fluids during the drilling operation, depending upon formations and pressures encountered. Also to acidize and/or frac for completion treatment.

Talk to the mud engineer if still on site.

You may have experience in this area, but if not, be careful.
Some operators use �creative� ideas to dispose of this stuff. If it was their idea to use this on your pond, be very careful