I love my Proxxon's! BUT I would NEVER use one to hone my magnets! For that task I use my Makita 18v Cordless drill on the slow setting while under the running faucet being careful to keep the drill chuck dry. The rotary tools just don't have enough grunt to hone magents IMHO, plus they turn too fast even at the slowest setting.
I have the Micromot 50 and the IBE and love both of them. They are so smoooth! The Micromot is powered with my power supply.
Good idea for the running water, as samarium cobalt powder is pyrophoric. You may even want to do it in a bucket of water so the powder doesn't accumulate in your drain pipes, especially if they are old style copper or cast iron....if someone ever needs to put a torch to your drain pipes, you could have a real problem.