FORT SASKATCHEWAN, ALBERTA, CANADA - The Westaim Corporation announced today that it has filed a Statement of Claim in Federal Court against the Royal Canadian Mint for patent infringement on its proprietary process for producing coin blanks.

The Statement of Claim states that the pre-annealing process set forth in the Mint's Invitation to Tender for a proposed new Winnipeg plating facility will infringe on Westaim's patent. The proposed new facility is scheduled to start construction on April 1, 1998.

"Westaim has been producing coinage for Canada and the world for 37 years and has no choice but to protect its intellectual property rights," said Greg McGlone, President of Westaim Coinage Products. "The government has consistently stated that it would not enter new business to compete with the private sector. Therefore, for the Mint to build a new plant that will not only compete with Westaim around the world, but appears to infringe on our patent, is completely unacceptable."

Added McGlone: "It is also unacceptable for an agency of the federal government to spend $30 million to compete head-to-head with a Canadian company, especially while this patent issue is outstanding. We are calling on the federal government to intervene and bring its agency into line."

Background

The filing of the statement of claim follows Westaim's attempts to convince the Mint to reconsider building a new $30-million facility that would compete directly with Westaim, both domestically and internationally.

In December 1997, Westaim presented the Mint with a comprehensive proposal (The Westaim Option) demonstrating its ability to produce the metal-bonded steel coins that the Mint plans to manufacture at its new facility. The proposal showed that the international market is too small to support both a Canadian private and a government -owned manufacturing facility. It also demonstrated that savings to the Canadian taxpayer in the order of $9 million per year would be realized without the federal government spending $30 million in up-front investment.

Nevertheless, on February 16, 1998, following an unusually short assessment period, a tender was accepted to start construction of the Mint's new facility.

Subsequently, Westaim offered the Mint the dedicated use of a full-plating line at its Fort Saskatchewan, Alberta plant on a long-term basis, a solution which would provide the same capacity as the planned $30-million Mint facility. The Mint showed no interest in this subsequent proposal.

Westaim Patents

The patents, dating to 1985, protect Westaim's inventions related to pre-annealing a steel core coin blank to reduce its hardness, then electroplating onto the core a special metallic coating (selected from copper and nickel alloys). This process eliminates or reduces the need to heat the electroplated blank to form the metallurgical bond after the electroplating, a process that requires great care to ensure that the smooth surface does not deteriorate and the coin is properly prepared for minting. Westaim understands that the Mint is planning to use this patented pre-annealing process in its proposed facility.

Westaim Coinage Division

Westaim has recently won substantial contracts from China ($14 million) and Brazil ($17 million), and has just completed a $13-million contract with the Philippines. Westaim's dispute with the Mint will not impact on projected revenues for at least two years.

The Westaim Corporation has a number of technology and industrial-related businesses. Westaim's technology businesses include: Westaim Biomedical, Westaim Surface Engineered Products and Westaim Advanced Display Technologies. Westaim's industrial-related businesses include coinage, aerospace materials and chemical products. Westaim is a TSE 300 company whose shares are listed on The Toronto Stock Exchange, The Alberta Stock Exchange and the Montreal Exchange under the trading symbol "WED".

For further information, please contact:
Tony Johnston, Senior Vice President Corporate Affairs
The Westaim Corporation
(403) 803-6301

For interviews Thursday, March 19
James Lorimer
Ottawa (613) 230-3155

Website: www.westaim.com