Stable dispersions of superparamagnetic nanoparticles that are already in use in biomedicine as image-enhancing agents also have potential use in subsurface applications. Surface-coated nanoparticles are capable of flowing through micron-sized pores across long distances in a reservoir, with modest retention in rock. These particles change the magnetic permeability of the flooded region, and thus one can use them to enhance images of the flood. In this paper, we model the propagation of a "ferrofluid" slug in a reservoir and its response to a crosswell magnetic tomography system.This approach to monitoring fluid movement within a reservoir is built on established electromagnetic (EM) conductivity-monitoring technology. In this work, however, we investigate the contrast between injected and resident fluids when they have different magnetic permeabilities. Specifically, we highlight the magnetic response at low frequency to the magnetic excitations generated by a vertical magnetic dipole source positioned at the injection well. At these frequencies, the induction effect is small, the casing effect is manageable, the crosswell response originates purely from the magnetic contrast in the formation, and changes in fluid conductivities are irrelevant.The sensitivity of the measurements to the magnetic slug is highest when the slug is closest to the source or receivers and lower when the slug is midway in the interwell region. At low frequencies, the magnetic response of the ferrofluid slug is largely independent of frequency. As expected for the conductive slug, the sensitivity of the inductive measurements is negligible at low frequencies whereas significant levels of detectability result at higher frequencies. We demonstrate sensitivity to the vertical boundaries of the slug by shifting the vertical position of the excitation source relative to the magnetic slug. The slug geometry plays a key role in determining the magnetic response. With a fixed volume of ferrofluid, there is an optimum slug geometry that results in the maximum magnetic response. Hydrodynamic dispersion of the slug has negligible effect on the magnetic response during early stages of the waterflood. As the slug travels farther into the formation, however, dispersion reduces the concentration of nanoparticles, and the spatial contributions of the magnetic measurements are more diffuse. We illustrate how these low-frequency excitation behaviors are consistent with the quasistatic magnetic dipole physics. The fact that the progress of the magnetic slug can be detected at very early stages of the flood, that the traveling slug's vertical boundaries can be identified at low frequencies, and that the magnetic nanoparticles can be sensed well before the actual arrival of the slug at the observer well provide significant value of the use of the magnetic-contrast agents in crosswell EM tomography.