Although Fortescue Ltd (ASX: FMG) shares have fallen heavily from their highs, many analysts still believe that they are overvalued.

In light of this, investors may want to look elsewhere for their iron ore exposure.

And one ASX 200 mining stock that could be just the ticket is named below.

Which ASX 200 mining stock is a better pick than Fortescue?

According to a note out of Goldman Sachs, its analysts think investors should be snapping up Champion Iron Ltd (ASX: CIA) shares.

Champion Iron owns and operates the Bloom Lake Mining Complex, which is located on the south end of the Labrador Trough in Canada.

Bloom Lake is an open-pit operation with two concentrators that primarily source energy from renewable hydroelectric power. The company notes that the two concentrators have a combined nameplate capacity of 15 Mtpa and produce a low contaminant high-grade 66.2% iron ore concentrate with a proven ability to produce a 67.5% Fe direct reduction quality concentrate.

What is the broker saying?

Goldman Sachs highlights that the ASX 200 mining stock released its quarterly update last week and delivered a mixed result. It said:

CIA reported an in-line Sep Q result with EBITDA of C$75mn vs. GSe C$73mn with in-line revenue and costs, but EBITDA was well below Visible Alpha Consensus Data of C$146mn. EBITDA margin was 21%, the lowest quarterly margin since Bloom Lake restarted in 2018 due to compressed high grade iron ore premiums and negative provisional pricing adjustments. That said, Bloom lake reported record material movements with mining performing well, although concentrate production of 3.17Mt was 7% below GSe due partly to impacts from harder ore, but iron ore shipments of 3.27mt were 2% above GSe.

Nevertheless, the broker has held firm with its buy rating on the ASX 200 mining stock and lifted its price target slightly to $7.50 (from $7.30). Based on its current share price of $5.93, this implies potential upside of 26% for investors over the next 12 months.

In addition, Goldman is forecasting a dividend yield of approximately 5.4% for investors in FY 2025. This boosts the total potential 12-month return to beyond 31%. It concludes:

Attractive valuation: the stock is trading at ~0.75x NAV (A$8.29/sh) and ~6.0x EBITDA (NTM). Our NAV is based on our long run Fe price of ~US$78/t (real) for 62% Fe and a US$50/t CIA average product premium assumption over 62% Fe benchmark. For every ~US$10/t increase in our long run price, our CIA NAV would increase by ~A$1.5/sh.

Incidentally, Goldman currently has a sell rating and $15.40 price target on Fortescue's shares.