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I have a couple of 58's that have the type 7 and i've DCC chipped them no problem. The motor sits aloft the chassis and has 2 tabs with the connecting wires soldered on. To chip simply solder grey and orange to these tabs, and black and red to the removed pickup wires.

The thing with the 7 is it's a small relativley low torque motor. As such Hornby have geared it right down so it spins like crazy even at low speed. This gives it quite good low speed control. It's also relativley quiet and, mostly due to the gearing, reasonably powerful.
The only problem i have is limited traction of the 58's chassis, and you can't open it up properly to put more weight in.
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