A couple things I would try, but I don't know if it matters.
1) set up an output and assign it to M3 clockwise. You probably need this to start the spindle. Are you calling M3 in Mach3 to start the spindle?
2) On the Spindle tab of ports and pins, uncheck the boxes in Special Functions. You have it trying to use feedback with out any feedback connected.
3) Make sure you have the correct pulley speed set up for the current pulley.