Dry casks will be a prevalent spent nuclear fuel (SNF) storage option until solutions for long-term storage or disposal are deployed. A dry cask storing 32 pressurized water reactor fuel assemblies will likely contain about 20 significant quantities of plutonium, so these structures require effective safeguards monitoring. An external remote monitoring system (RMS) is proposed to advance the current dry cask safeguards regime which relies on containment and surveillance. The objectives of this study were to assess the performance of the external RMS as a detection system and to develop a simulation approach for estimating measurements. Small-scale experiments of generic neutron source diversions mimicking SNF diversion from a dry cask were conducted and the nondetection probability was calculated for a variety of measurement times. MCNP simulations were carried out to assess the degree to which the measurement results could be predicted. A previous simulation methodology was advanced to consider uncertainty in the activity of sources being measured. The study concluded that the external RMS performs well as a neutron detection system and that MCNP simulation is a viable tool both for predicting measurements made with the external RMS and for calculating nondetection probabilities of hypothetical, generic diversion scenarios.