The recent pullback in gold and silver has created a tremendous opportunity for investors, and there are signs that the bull market in precious metals is far from over. Among the best ways to bet on a rebound in gold and silver is with precious metals streamers such as Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) or Franco Nevada Corp. (TSX:FNV)(NYSE:FNV).

Just like precious metals miners, they offer leveraged exposure to gold and silver, but they also possess a number of advantages that make them superior investments. 

Now what?

Firstly, streaming companies have significantly lower expenses.

Mining is a capital-intensive activity where tremendous costs are incurred across all aspects of its life cycle, including exploration, mine development, operations, closure, and reclamation. This all adds up, eating into the margins that they can generate from their operations.

Precious metals streamers are not involved in mining operations. Instead, they provide funding to miners in exchange for receiving either a royalty on the gold and silver produced or the right to acquire a portion of that production at a price well below the market value.

This means that their costs are fixed and far lower than those incurred by miners, as illustrated by their second-quarter 2016 results.

For that period, Silver Wheaton’s cash costs were US$4.58 per ounce compared to First Majestic Silver Corp.’s US$6.41 per ounce, and Pan American Silver Corp.’s $5.57 per ounce.

As a result, streamers can generate substantially higher margins when precious metal prices rise and remain profitable at prices that miners can’t when prices fall.

Secondly, while offering the same leveraged exposure to precious metals, streamers are lower-risk investments.

This is because mining is a hazardous activity where operational incidents can incur significant expenses or trigger costly production outages.

Even the major gold miners are not immune to these occurrences.

Goldcorp Inc. was handled harshly by the market after its second-quarter gold production fell by a staggering 32% year over year. This was caused by a sharp decline in ore grades and production outages at its flagship Peñasquito mine.

Then there is the risk that the considerable capital miners need to invest in exploration and mine development will deliver a negligible return.

Finally, streamers have a more diversified asset base than miners.

This not only helps to reduce risk, but it also enhances returns.

Probably the most diversified metals streamer is Franco Nevada. It has a globally diversified portfolio of streaming and royalty contracts for a range of precious metals and oil across North America, Latin America, Africa and Australia.

As a result, it obtains three-quarters of its revenue from gold and the remainder from a mix of silver, platinum group metals, and oil, giving investors broad exposure to a range of commodities.

The capital-intensive nature of mining makes it is virtually impossible for any miner to diversify its assets in this fashion. Investors need only remember the troubles that befell Barrick Gold Corp. when it went on a massive debt-fueled buying spree earlier this decade that was aimed at diversifying its asset base. 

So what?

Precious metal streamers offer investors considerable advantages and less risk over investing in miners. When these factors are considered in conjunction with their ability to provide the same leveraged exposure to the price of gold and silver, they are certainly superior investments. Both Silver Wheaton and Franco Nevada offer investors a lower-risk means of adding gold and silver to their portfolios.

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Fool contributor Matt Smith has no position in any stocks mentioned. The Motley Fool owns shares of Silver Wheaton. Silver Wheaton is a recommendation of Stock Advisor Canada.