CALGARY, ALBERTA, CANADA – The Westaim Corporation announced today that it is taking one-time, non-cash charges in the range of $35 to $40 million, including a $12-million write-down of the company’s coin blank manufacturing division’s net assets and a $23-million write-down of underutilized production equipment and related assets for its coating products.

“This write-down of these non-core divisions more accurately reflects the economic reality for these businesses,” said Kevin J. Jenkins, President and CEO of Westaim. “Our focus continues to be on our high-potential investments, iFire Technology and NUCRYST Pharmaceuticals. We will continue to protect our strong balance sheet with $135 million cash and no debt as we lead our investments to market.”

In the second quarter of 2001, Westaim combined Surface Engineered Products and Ambeon aerospace products into one operating division under the name Westaim Coating Solutions to create efficiencies in research and development and administration. The write-down of underutilized assets in Westaim Coating Solutions to net recoverable amounts is because of changes to the manufacturing process resulting in surplus equipment.

Westaim’s coinage business has been in operation since 1961 and provided a consistent source of earnings selling coin blanks to mints around the world. With the completion of the Euro coin project – the largest coinage project in history – the market is in a state of oversupply, and demand for coin blanks has dropped. Westaim has significantly reduced operations of its coinage facility while alternatives are being reviewed. The write-down of $12 million is primarily on capital assets, to reflect current net recoverable amounts.

“World coinage producers, including several national mints, increased production to accommodate the Euro, which has created an overcapacity in the market,” said Mr. Jenkins. “Meanwhile, the Royal Canadian Mint’s $30-million coin blank production facility, which opened in 2000, has created additional Canadian capacity and competes directly for contracts with Westaim’s coinage business internationally.”


The Westaim Corporation is a technology accelerator that launches exceptional technologies into the marketplace. Its technology investments include NUCRYST Pharmaceuticals, which researches, develops and commercializes medical devices and pharmaceutical products based on its nanocrystalline silver technology, and iFire Technology, which has developed a revolutionary low-cost flat panel display. Westaim's common shares are listed on Nasdaq under the symbol WEDX and on The Toronto Stock Exchange under the symbol WED.

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For more information contact:

Tony Johnston, Senior Vice President
The Westaim Corporation
(403) 234-3103
info@westaim.com
www.westaim.com


This news release may contain forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and the Company can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including financial considerations and those predicting the timing and market acceptance of future products. The Company disclaims any intention or obligations to revise forward-looking statements whether as a result of new information, future developments or otherwise. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement.