  The first known magnetic mineral, magnetite (Fe$_3$O$_4$), has unusual
properties which have fascinated mankind for centuries; it undergoes the Verwey
transition at $T_{\rm V}$ $\sim$120 K with an abrupt change in structure and
electrical conductivity. The mechanism of the Verwey transition however remains
contentious. Here we use resonant inelastic X-ray scattering (RIXS) over a wide
temperature range across the Verwey transition to identify and separate out the
magnetic excitations derived from nominal Fe$^{2+}$ and Fe$^{3+}$ states.
Comparison of the RIXS results with crystal-field multiplet calculations shows
that the spin-orbital $dd$ excitons of the Fe$^{2+}$ sites arise from a
tetragonal Jahn-Teller active polaronic distortion of the Fe$^{2+}$O$_6$
octahedra. These low-energy excitations, which get weakened for temperatures
above 350 K but persist at least up to 550 K, are distinct from optical
excitations and best explained as magnetic polarons.
