Do a compression test, check your valve clearances.
Usually I'd star investigating and tearing stuff apart. but this time only, drain the oil, and fill the engine with diesel fuel. Run it for about 30 seconds, drain the diesel and add oil, run and drive for an hour then change oil again. A good bottom end flush can do wounder. The diesel will lubricate and clean extremely well.. but doesn't lubricate like oil it self. It's also hard to ignite, so no worries about it catch fire or anything. You'd be surprised what it could flush outta a car lol.
If it keeps smoking with new oil, then that sucks. When was the last time the oil was changed? You might also be running lean. Piston get ho, expand to much, wear piston down. That is the only thing i could think of that would cause the non magnetic silvery oil.
I just wanna go fast. If your not first, your last!!
Reproducing the Tecate CDI. Contact me if you need one. I'm most accessible on FaceBook. You can find me on the 1984-1987 Kawasaki Tecate KXT250 Group.