A new pencil mill cycle was introduced
in EdgeCAM version 7.50. Please note that the Pencil Mill operation uses
the "old" (i.e. pre-version 7.50) cycle. A new pencil mill cycle was introduced
in EdgeCAM version 7.50. Please note that the Pencil Mill operation uses
the "old" (i.e. pre-version 7.50) cycle.
Click on the Pencil
Mill Operation 
button.
Digitise the surfaces to be machined, then perform a Finish.
Digitise the containment boundary entities (if required), then perform a Finish.
Complete the dialog box for the operation, then click OK.
EdgeCAM now generates the toolpaths for the pencil mill operation, including any moves to position the tool.