CALGARY, ALBERTA, CANADA - The Westaim Corporation today announced that it has entered into an agreement for a $34-million bought deal financing with a syndicate of underwriters led by GMP Securities Inc. The proceeds from the offering will be used to fund construction of a flat panel television display pilot production facility for its subsidiary, iFire Technology. Certain directors of the Corporation (Ian Delaney, Guy Turcotte, Daniel Owen and Frank King), have agreed to purchase not less than $16.5 million of the total amount.

A total of 10 million new common shares will be issued at a price of $3.40 per share. In addition, GMP Securities has been granted an option to increase the offer by 4,705,883 shares, which could increase the total amount raised to $50 million. The offering is subject to normal regulatory approvals including approval of the Toronto Stock Exchange and is expected to close on or before August 4, 2004.

iFire's flat panel technology has progressed to the point that internal milestones have been met earlier than expected. This has accelerated the company's plans for construction of the pilot production facility. The Corporation's Board of Directors believes it is important to continue to maintain a strong balance sheet as iFire moves into pilot construction and operation.

Westaim's subsidiary, iFire Technology, will use the proceeds, along with a previously announced US$10-million loan from Dai Nippon Printing Co., Ltd. (DNP), to upgrade its Toronto flat panel display facility. Currently a research and development facility best suited for development work on displays up to 17-inches in size, iFire will upgrade the plant and the tool set to create a pilot production facility for larger, mid-30-inch sized flat panel television display modules. The capital cost of this project is estimated to be approximately $46 million.

iFire's flat panel displays are based on its proprietary thick-film dielectric electroluminescent (TDEL) technology. Its first 34-inch prototype displays have native high definition with a format of 1280 x 768 pixels. It is capable of handling both 720p video and XGA-class computer data.

iFire is entering pilot production in conjunction with its collaboration partner, DNP. The first several steps in the fabrication, including the printed row electrodes and application of iFire's proprietary thick film dielectric layer, are completed by DNP at its primary production line in Kashiwa, Japan. The panels are then shipped to iFire's facility in Toronto, Canada, where the remaining steps are completed, including the electronics assembly steps.

iFire expects its displays to have a significant manufacturing cost advantage over other flat panel technologies. iFire commissioned an independent study by Industrial Design and Construction (IDC), a highly respected engineering firm, to compare its manufacturing model against both LCD and PDP, in a generation 6 manufacturing environment. The study indicated that iFire could have an estimated 30 to 50 per cent advantage in both capital and module costs. Pilot production is intended to demonstrate this cost advantage in a manufacturing environment and will be a blueprint for a larger, commercial volume production facility.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

In addition to iFire Technology, The Westaim Corporation's technology investments include NUCRYST Pharmaceuticals, which researches, develops and commercializes wound care and pharmaceutical products based on its nanocrystalline silver technology. 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:
David Wills
Investor Relations
(416) 504-8464

info@westaim.com
www.westaim.com