Placer mining involves washing stream gravel to separate and save free gold particles. Usually a placer mine must discharge excess effluent water, which contains some residual suspended fine silt and clay particles, from a settling pond, back into the stream. This study examines the applicability of introducing placer effluent through a diffuser to lessen environmental impact. A diffuser is a mechanism which introduces effluent fluid into the main current of a receiving stream so that mixing and dispersion are facilitated. A diffuser usually consists of a header pipe with one or more discharge ports. Effluent is ejected from the ports at high velocity into the receiving water. Performance of the diffuser depends on the diameter, spacing, and angle of the ports in relation to the water column. Diffusers are used effectively in many industrial applications. Computer programs have been developed which predict the effluent plume from a diffuser, using input data from both the receiving stream and the effluent discharge. We used the CORMIX model, which was developed for the U.S. Environmental Protection Agency. This program can also be used in the design of diffusers. We modelled two series of scenarios using receiving water data for the Fortymile River. In one series, we varied the concentration of suspended solids in the effluent. In the other series, we varied the flow rate of the effluent. In alll cases from both of these series of models, the CORMIX program predicted that the effluent diffused into the receiving water rapidly. A water quality objective of 12.5 mg of suspended sediment per litre of water was achieved in a very short distance downstream of the diffuser. We also used the CORMIX model to predict effluent behaviour in some hypothetical receiving streams. These scenarios showed that the larger the receiving stream, the better the diffusion rate. It also showed that diffusers would not be as effective on small streams where large effluent concentrations are discharged. Dilution is limited by the flow rate of the receiving water. The CORMIX model cannot predict whether sediment from the effluent plume will settle out on the streambed. Our team hydrologist examined the question of potential sedimentation by using the following techniques:: comparing background to introduced sediment levels, calculating the shear/fall velocity ratio for the sediment, comparison to flume testing, and comparison to other field investigations. He predicted that in the example of the Fortymile River using our mine effluent parameters, there would be little or no sediment deposited on the streambed from a diffuser installation. The use of diffuser systems to disperse placer effluent into receiving water appears to be an effective way of mitigating the impact of placer mining on the aquatic environment, providing there is adequate flow in the receiving stream. Effluent is dispersed into the stream flow, reducing the possibility of sedimentation of the stream substrate.