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The emerging field of spintronics explores the many possibilities offered by the prospect of using the spin of the electrons for fast, nanosized electronic devices. The effect of magnetization acting on a current is the essence of giant or tunnel magnetoresistance. Although such spintronics effects already find technological applications, much of the underlying physics remains to be explored. The aim of this article is to demonstrate the importance of spin mixing in metallic nanostructures. Here we show that magnetic clusters embedded in a metallic matrix exhibit a giant magnetic response of more than 500% at low temperature, using a recently developed thermoelectric measurement. This method eliminates the dominating resistivity component of the magnetic response and thus reveals an intrinsic spin-dependent process: the conduction-electron spin precession about the exchange field as the electron crosses the clusters, giving rise to a spin-mixing mechanism with strong field dependence. This effect appears sensibly only in the smallest clusters, that is, at the level of less than 100 atoms per cluster.