Pavilion Means Purpose
One of the most common questions asked about the Pavilion Flow-Through Fund is “Why the longer time horizon?”
While Pavilion is well known for its tax advantages, it’s also designed differently to help investors diversify their portfolio and participate in the potential upside of Canada’s resource sector.
In an investing environment dominated by daily market headlines and short-term performance metrics, patience is often in short supply. Yet, in sectors like junior mining, where value creation can take years to materialize, time is the essential ingredient.
Pavilion is purpose-built to capitalize on this reality. Our 5 + 1 + 1 year structure gives investments the time they need to work, enabling us to pursue superior long-term returns while remaining grounded in the discipline of active portfolio management.
So, here’s a quick look at why the fund is structured the way it is and why patience is at the core of our strategy.
Benefiting Both Investors & Junior Miners
Unlike traditional flow-through funds, which often roll into mutual funds within six to 24 months, Pavilion is structured with a long-term horizon from day one. It has an initial expected 5-year life, with the option to extend by 1-year at the Portfolio Manager’s discretion. If by the end of year six, we believe there are still unrealized opportunities, we hold a formal investor vote to extend the fund to a seventh and final year. This “5 + 1 + 1” approach is more than a structure, it’s a strategic alignment with the way value is unlocked in the resource sector.
As our Portfolio Manager, Dan Pembleton, says:
“I designed Pavilion to mirror the playbook that made mining billionaires –long-term, patient capital, deployed with conviction…”
That philosophy dates back to 2008, when Pavilion was founded as a dedicated flow-through vehicle to give investors exposure to resource equities with a significant tax-advantaged kicker, but with the added benefit of time –a key ingredient that Dan saw in the wealth creation formula of Canadian resource billionaires.
Because mining is not a quarterly business.
From grassroots exploration through to resource estimates, economic studies, permitting, financing, and eventual production, even the most successful junior mining companies typically require 5–10 years to unlock value. If we know that these cycles take time to play out, then as investors, we need to match that timeline. That’s where Pavilion’s structural advantage lies – with five to seven years to invest, monitor, and exit positions, we’re not forced to liquidate holdings prematurely. This long runway gives us flexibility to pursue multi-bagger opportunities across commodities that are early in their macro cycles. Rather than attempting to time the market, we position ahead of emerging trends –be it gold, uranium, copper, or critical minerals, and allow the thesis to unfold over time.
Actively Managed Advantage: The Portfolio Benefits of “5+1+1”
Junior mining investing is inherently asymmetric. In a typical Pavilion portfolio of 20–30 names, we expect only a handful –two or three – to generate the majority of the fund’s returns. These are the names that might appreciate 10x, 20x, or more. Pavilion’s active management and investment expertise is essential with this reality in mind – and differs than traditional portfolio management.
We don’t exit our highest-conviction names prematurely just to lock in modest gains. Instead, we allow the portfolio to become more concentrated in outperformers over time. Pavilion is not a fund that rebalances mechanically. It’s a fund that concentrates into success. We actively trim low-conviction positions, return capital via distributions where appropriate, and selectively reduce exposure in names that have run but still hold long-term promise. We do not automatically rebalance by buying more of underperformers. We are always focused on managing risk, preserving optionality, and backing the stories that continue to deliver.
This takes time and patience but when a Pavilion fund enters its final years (five – seven), the portfolio may look quite different than it did in year one.
Unlocking Value vs Noise
In today’s 24-hour news cycle and financial media ecosystem, short-term thinking is constantly reinforced. Sensational headlines and daily price action dominate the conversation, pushing investors toward emotional decisions and reactionary trades. But wealth in junior mining is rarely created in the short term. It’s created by staying invested through the noise and allowing the macro thesis and fundamentally strong companies time to execute and play out. Pavilion was designed to cut through the noise with patience and purpose. By giving ourselves the time and flexibility to manage through commodity cycles and discovery timelines, we maximize our ability to deliver absolute returns.
“In mining, the biggest gains don’t happen overnight. They happen with patience, partnership, and expertise. Pavilion was designed with that in mind.”
–Dan Pembleton