you don't use fine sand, you always use coarse. My dad was a bricklayer and I absobred a few things, that being one of them. The idea though is you don't use mortar, either, you use cement. There's a difference. When you plaster, unless you have a lot of noticeable cracks, you're going to use only a cement slurry. That is, as long as your surface is smooth already, you take the cement and make a heavy paint from it, then slap that on. The cement will waterproof it. Mortar is NOT waterproof.
If you go this route, acidify (muriatic acid; be careful, use gloves, etc) the area to clean, then apply your coating of cement and sand, let it cure, then apply the cement slurry after. My dad brushed it on, so its more or less like painting.
Had this out with Waterbug once, he didn't think I knew what I was talking about, but I grew up with (4) 200+ gallon cement aquariums and that's how my dad waterproofed them from the inside. Of course, you have to have a stable structure with re-rod etc to begin with.
All the above said with this caveat; if you're trying to fix a cement pond, it'll work but not forever. As long as nature can get at it, the ground and seasons will work to make your pond crack again. I'd seriously consider saving heartache and time and just install a liner inside your cement pond.
But, the above advice will do ya.
