CALGARY, ALBERTA, CANADA – The Westaim Corporation announced today that for the second quarter ended June 30, 2002 it recorded a net loss of $25.6 million, or 33 cents per share, on revenue of $11.6 million. The results include a loss from discontinued operations of $14.2 million relating to the previously announced closure and divestiture of Westaim's Coinage and Ethylene Coatings businesses. Operating losses from continuing operations were $5.1 million in the quarter compared to $1.5 million in the same period last year as a result of planned increases in R&D expenditures.

In the second quarter of 2001, the Company reported net earnings of $2.0 million, or three cents per share, on revenues of $11.6 million. These prior year results included a loss from discontinued operations of $6.6 million and a $20.1 million gain on sale of assets related to the sale of Nucryst Pharmaceuticals' burn dressing business to Smith & Nephew.

For the six months ended June 30, 2002 the Company posted revenues of $23.7 million and a net loss of $34.0 million, or 44 cents per share, compared to revenues of $25.3 million and a net loss of $6.0 million, or eight cents per share, in the same period last year. The loss from continuing operations for the first half of 2002 was $17.5 million compared to $14.8 million before the gain on sale of assets in 2001.

The loss from discontinued operations of $16.5 million for the first half of 2002 comprises actual and projected operating losses from the discontinued businesses of $8.9 million, compared to $11.3 million in 2001, and provisions for workforce reductions, shutdown and asset disposal costs of $7.6 million. Future cash costs of the discontinued operations are expected to be offset by cash proceeds from the related asset dispositions.

At June 30, 2002 Westaim had $113.7 million in cash and short-term investments and no debt.

"We have made significant progress at Westaim in 2002 – most notably iFire's collaboration with Sanyo Electric and the improved performance of our 17" flat panel display”, said Kevin J. Jenkins, President and CEO of Westaim. “In addition, we have increased the focus of our resources on our core businesses, Nucryst and iFire, as they both move into new phases of development – Nucryst into pharmaceuticals and iFire towards commercialization of its flat panel TV. Financial results from our continuing operations are on plan and our balance sheet is strong."

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 trading 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.

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