FORT SASKATCHEWAN, ALBERTA, CANADA - The Westaim Corporation announced today that for the year ended December 31, 1998, it recorded a net loss of $15.5 million, or 21 cents per share, on revenues of $85.1 million. For the year ended December 31, 1997, Westaim recorded earnings from continuing operations of $2.9 million or 4 cents per share on revenues of $92.2 million. Including results from discontinued operations, Westaim recorded a 1997 net loss of $30.5 million or 41 cents per share.

For the three months ended December 31, 1998, Westaim reported a net loss of $8.8 million, or 12 cents per share, compared with a loss from continuing operations of $2.4 million, or 3 cents per share, in the fourth quarter of 1997. Including results from discontinued operations, the 1997 fourth-quarter net loss was $4.2 million or 6 cents per share.

At December 31, 1998, Westaim’s cash position stood at $193.6 million and no debt.

“Westaim’s three high-potential technology subsidiaries made tremendous progress in 1998 with the achievement of key milestones,” said Westaim President and CEO Kevin Jenkins. “Two of the technology subsidiaries, Westaim Biomedical and Surface Engineered Products, each launched a product into the marketplace. Our third technology unit, Westaim Advanced Display Technologies, also made dramatic technological progress, scaling up the size of its color prototype flat panel displays from five inches to 17 inches in just over 12 months—a pace unheard of in the industry. All three have expanded their manufacturing capabilities and more than doubled personnel. We are very encouraged by the progress made in 1998 and will continue to focus on aggressively growing these businesses.”

“We are also pleased with our Coinage Products division, which has won several coin blank contracts for the new Euro currency from France, Germany, Finland, Portugal and Spain,” Jenkins added. Westaim is the largest non-European supplier of coin blanks for the one-, two- and five-Euro cent coins.

Westaim’s industrial operations, made up of aerospace, coinage and chemical businesses, generated cash flow of $24.2 million in 1998, helping to fund the research and development activities of Westaim’s technology subsidiaries.

The following are highlights of developments within the three technology subsidiaries during the fourth quarter of 1998:

Westaim Biomedical Corp.
At year-end 1998, Westaim Biomedical’s first product, Acticoat^TM antimicrobial barrier dressing, was being used by 50 North American burn units. The Acticoat^TM dressing’s effectiveness in treating burn wounds and its exceptional ability to control infection-causing bacteria and fungi were confirmed in two separate studies that were reviewed by industry peers and published in the November/December 1998 issue of Journal of Burn Care & Rehabilitation, and Wounds.

Surface Engineered Products Corp.
During the fourth quarter of 1998, Surface Engineered Products completed its 100,000-square-foot manufacturing facility in Edmonton, Alberta. By year-end 1998, seven leading ethylene producers, four of whom are among the world’s 10 largest, had installed or ordered Surface Engineered Products’ CoatAlloy^TM anti-coking products.

Westaim Advanced Display Technologies Inc.
In December 1998, Westaim Advanced Display Technologies (Westaim ADT) achieved its first prototype of a 17-inch color desktop-sized flat panel display, a key milestone in the development of a flat panel television using its proprietary Solid State Display (SSD) technology. Westaim ADT was also recognized for its breakthrough, low-cost SSD technology by Popular Science magazine for the “Best of What’s New” in 1998.

About Westaim
The Westaim Corporation specializes in launching high-potential technologies into the marketplace. Its technology subsidiaries include: Westaim Biomedical Corp., which has developed an infection control technology for use in the treatment of wounds; Surface Engineered Products Corp., which has developed surface engineering technologies and materials for severe applications in the petrochemical industry; and Westaim Advanced Display Technologies Inc., which is developing a revolutionary low-cost flat panel display. Westaim also operates three industrial businesses which produce aerospace materials, coin blanks and chemicals. Westaim is a TSE 300 company whose common shares are listed on The Toronto Stock Exchange, The Alberta Stock Exchange and The Montreal Exchange under the trading symbol “WED”.