For immediate release

Westaim announces 2004 year-end results

CALGARY, ALBERTA – February 17, 2005 – The Westaim Corporation announced today that for the year ended December 31, 2004, it recorded a net loss of $25.2 million, or 30 cents per share compared to a net loss of $35.4 million, or 45 cents per share, in the previous year.

For the three months ended December 31, 2004, the Company posted a net loss of $10.6 million, or 11 cents per share, on revenues of $6.1 million compared to a net loss of $17.9 million, or 23 cents per share, on revenues of $3.6 million in the same period in the previous year.

The divisional loss from continuing operations for 2004 was $23.0 million, compared to a loss of $23.4 million in 2003. This loss primarily reflects the planned level of investment towards research and development in NUCRYST Pharmaceuticals and iFire Technology, Westaim’s technology divisions.

In 2004, results included income from discontinued operations of $3.6 million compared to income from discontinued operations of $2.4 million in the same period of 2003. The net income from discontinued operations in 2004 included a $5.4 million gain on the sale of the Company's Ambeon operating division. Ambeon was sold on January 29, 2004 for net proceeds of $33.4 million.

At December 31, 2004, Westaim had $101.1 million in cash and short term investments, compared to $68.1 million at December 31, 2003.

In the third quarter, The Westaim Corporation closed an equity financing offering for total gross proceeds of $50 million further adding to its strong cash position. The financing involved an offering of 14,705,883 Westaim common shares bought by a syndicate of underwriters led by GMP Securities Ltd. and including CIBC World Markets Inc., Haywood Securities Inc. and Paradigm Capital Inc. Four members of Westaim’s Board of Directors personally purchased $16.5 million worth of shares under the offering.

“Both NUCRYST and iFire Technology met or exceeded their expectations in 2004,” said Barry M. Heck, President & CEO of Westaim. “NUCRYST generated record earnings and completed its first human trials for a new atopic dermatitis drug. iFire made the first public display of its 34-inch prototype display and began the first phase of commercialization with construction of the pilot plant that will validate the TDEL technology performance capabilities and help prove its projected 30 to 50 percent manufacturing cost advantage over existing flat panel display technologies.”

Review of Operations:

iFire Technology
In May 2004, iFire demonstrated its high-definition thick-film dielectric electroluminescent (TDEL) 34-inch prototype television display for the first time to an audience of flat panel scientists and industry peers at the annual Society for Information Display (SID) conference held in Seattle, Washington. The 34-inch color display is the largest flat panel ever produced using inorganic electroluminescent technology.

In 2004, iFire began the expansion of its research and development facility to include pilot manufacturing of mid-30-inch sized flat panel displays using its proprietary TDEL technology.  Construction of the pilot production facility is anticipated to be completed in the mid-2005 timeframe.

NUCRYST Pharmaceuticals
NUCRYST’s profitable wound care division continued to grow in 2004 with revenue of $31.9 million, compared to $16.2 million in 2003. The division generated a profit of $20.0 million in 2004 compared to $7.8 million in 2003. NUCRYST’s agreement with Smith & Nephew plc for the global sales and distribution of Acticoat™ dressings for serious wounds, including burns and chronic wounds, includes up to US$56.5 million in milestone payments that can be earned upon the achievement of sales and regulatory milestones. The results for 2004 include US$10 million in milestone payments, with one US$5 million payment achieved ahead of schedule in the third quarter of 2004. To date, NUCRYST has earned US$14 million in milestone payments as a result of strong global sales of Acticoat™ dressings.

NUCRYST has begun a $7 million expansion of its production facility in Fort Saskatchewan, Canada to meet anticipated demand from Smith & Nephew for its Acticoat™ family of dressings. The expansion will include new production equipment, overall facility expansion and a new cleanroom control environment. NUCRYST anticipates that the facility expansion will be completed by the end of 2005.

In September 2004, NUCRYST received positive and encouraging results from its first Phase 2a clinical trials for its drug candidate, topical NPI 32101. The product will potentially be used to treat atopic dermatitis, a form of eczema. The purpose of the study was to evaluate the safety and effectiveness of topical NPI 32101 in improving the signs and symptoms of atopic dermatitis. The results were an important validation of NUCRYST’s proprietary technology as a pharmaceutical agent and demonstrated that topical NPI 32101 has the potential to be a well-tolerated and effective drug for the treatment of atopic dermatitis. Based on the results, NUCRYST will continue human clinical trials for topical NPI32101.

NUCRYST has begun pre-clinical research on other antimicrobial and/or anti-inflammatory drug opportunities for its patented Rx nanocrystals. Infection and inflammation are issues in many therapeutic areas and demand exists for effective pharmaceuticals and medical devices and products for the treatment of these common afflictions.

The Westaim Corporation’s 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.

-30-

For more information contact:
David Wills
Investor Relations
(416) 504-8464
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 but not limited to financial considerations and those predicting the development or upgrading of facilities and equipment, partner discussions and negotiations, product development, product commercialization, manufacturing costs, cost advantages, construction timeframes, earning of milestone payments, anticipated product demand, potential product use, potential product effectiveness, and production and capital costs. The Company disclaims any intention or obligation 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.