A new algorithm for position and speed estimation in permanent magnet synchronous motors is presented, which is based on the high frequency signal injection and uses an algebraic approach. Motor inductances are estimated by simple mathematical relationships and motor position and speed are tracked using a phase locked loop technique. The estimated machine inductances values are utilized, in real time mode, as parameters, in the field oriented control of the permanent magnet synchronous motor for an improved robustness. A sensorless drive, based on the algorithm presented, has been tested on a low cost field programmable gate array (FPGA) platform. A simple communication protocol, between host PC and FPGA board, has been designed and implemented, for algorithm parameters real time update and state observation.