Diavik Diamond Mines Inc. proposes to develop a diamond mining project at Lac de Gras in the Northwest Territories. As part of the Environmental Assessment, and mine design, estimates of mine water inflow quantity and quality were required. This paper describes the field investigations and numerical modelling studies that were completed in order to evaluate the groundwater conditions at site. The Diavik Diamonds Project is located in the Canadian Shield within the region of continuous permafrost, however mining operations will be located in unfrozen ground within the confines of a diked-off portion of Lac de Gras. Field investigations used to characterise the hydrogeological regime at site consist of extensive packer testing supplemented with a limited program of borehole flowmeter testing, borehole temperature logging and borehole camera imaging. This information was used to develop a conceptual hydrogeological model for the site, which in turn was modelled numerically using MODFLOW and MT3DMS to predict groundwater inflow volumes and water quality with time. Results indicate that the total mine inflows are expected to range up to 9,600 m3/day with TDS concentrations gradually increasing in time to maximum levels of about 440 mg/L. The modelling also showed that lake water circulating through the rock mass will eventually comprise more than 80% of the mine water handled.