Because my milling machine is out of action, I have been forced to use the lathe and vertical slide for some items.
I am no expert on this so what follows is my experience:
I use direct collets in the headstock to hold the milling cutter. If you use a chuck the cutter can work its way out of the chuck, and if you use a 3 jaw self-centring chuck the cutter will not be concentric with the lathe centre line. Unless you are very lucky, that is. Another advantage of direct collets is that the overhang from the mandrel is reduced to a minimum which helps to reduce wobble and thus aid cutting accuracy.
My vertical slide is 75 or 80mm wide with about the same distance vertical travel. I always use paper between the work and the jaws: this helps to improve grip and thus reduce the risk of the work slipping. If the work is rather large, then I use a pair of plates, one each above and below the work, with the obligatory pieces of paper. The idea here is that this helps to spread the clamping force over more of the work. On my vertical slide, the moving jaw has a pair of 8mm clamping screws to clamp the jaw onto the slide: the procedure here is to setup the work, semi-tighten the jaw onto the work, semi-tighten the clamping screws, tap into pace using a soft(ish) faced mallet, fully tighten the jaw onto the work and then fully tighten the clamping screws. Often, I have to use a piece of tube to undo them, never to tighten them. This is actually self-preservation after having had my knuckles severely rapped by the corners of the jaws when the screws suddenly slacken.
You will need to use a dti or similar to line up one of the faces of the work. You may need to use same to align the vertical slide when mounting it.
Recently, I was knocking up an adaptor for my lathe which required the removal of an area of steel 22mm x 18mm x 5mm deep. I used an old, broken 12mm Rippa end mill at a speed of 500rpm. It was held in a 12mm direct collet, the work was securely clamped up with bits of paper and it worked very well indeed – much to my surprise.
As Bazyle has said, you will need a slot mill for your particular purpose. I have only done a 6mm slot in brass but by using the above principles, it was cut quite easily indeed.
Regards,
Peter G. Shaw