Mag chain touching oil pump

Something very wrong here. Can you post a photo of all the parts in place. The diagram shows them well apart from each other but is a bit misleading. The reality should be around 3mm gap between the chain and pump.

As Phil says should not touch ,However the intermediate gear can (and does ) sometimes have its bush bored excentric which can give alarming variences in the cam and mag chain slack. I am experiencing this on the 650 I am working on. Chain tension varies so much that it goes from too slack ,then too tight making the motor feel hard to turn over .Looks like I am going to have to fit a new bush . This is with a new chain and a dummy cover !!.

Jason - If you have the correct studs for mounting the mag to the crankcase you can adjust the chain tension.  The studs are 5/16 inch but are waisted to 1/4 inch where the mag holes are situated.  The nuts are a reduced hex  5/16 inch BSCycle (26 tpi) and the washers are recuced diameter 5/16 inch.  There is an art  to tightening the chain.  Make sure that the auto advance unit is tightened to the mag armature then pinch the outer nut tight and move the mag in a rotating curve up and down, If the chain tightens enough the job's done and you can tighten all the mounting nuts and then slacken the advance unit to time the ignition. If not,  then do the same procedure with the inner nut tightened first and if that also fails try the upper nut first u.s.w.  In one combination you will get it right........eventually.  Good luck, Howard  

If you need to slacken the bottom fixing ,it can be a bitch . you will need to remove the oil supply banjo from behind the timing cover , a specially cut down and ground  spanner will just do it. The much recommended  extended nut  is good once fitted , but getting it placed is a nightmare ,barely worth the trouble.

It's not possible to see from the pictures.  But the magneto chain is supposed to be narrower than the cam chain.  Are yours both the same?  The cam chain does a lot more hard work than the magneto chain.

Very nice implement Jason, cheers howard

I would thoroughly recommend replacing the nut with the BSA extended nut (67-1259). Load available but make sure you choose one with a thin shaft. Some are supplied with a thick shaft which touches the back of the crankcase stopping it fitting.
Velocettes are even worse - and the extended nut doesn't even work for them.