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Exhibit 99.1
 
   The Westaim Corporation
  Annual Information Form
 For the Year Ended December 31, 2006
  MARCH 19, 2007




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THE WESTAIM CORPORATION
ANNUAL INFORMATION FORM
For the Year Ended December 31, 2006
 March 19, 2007
 TABLE OF CONTENTS
 PAGEFORWARD-LOOKING STATEMENTS
    
    
    1CORPORATE STRUCTURE
    
    
    2GENERAL DEVELOPMENT OF THE BUSINESS
    
    
    3DESCRIPTION OF THE BUSINESS
    
    
    4IFIRE TECHNOLOGY CORP.
    
    
    4NUCRYST PHARMACEUTICALS CORP.
    
    
    7INVESTMENTS
    
    
    13FINANCIAL INSTRUMENTS
    
    
    13SUPPLIES AND RAW MATERIALS
    
    
    13ENVIRONMENTAL
    
    
    14EMPLOYEES
    
    
    14RISK FACTORS
    
    
    14MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    15CAPITAL STRUCTURE
    
    
    15DIVIDENDS
    
    
    15MARKET FOR SECURITIES
    
    
    15TRANSFER AGENT AND REGISTRAR
    
    
    16EXPERTS
    
    
    16DIRECTORS AND OFFICERS
    
    
    16AUDIT COMMITTEE
    
    
    18CODES OF CONDUCT
    
    
    19AUDIT FEES
    
    
    19PRE-APPROVAL OF AUDIT AND NON AUDIT SERVICES BY INDEPENDENT AUDITORS
    
    
    19ADDITIONAL INFORMATION
    
    
    19AUDIT COMMITTEE CHARTER
    
    Appendix A




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FORWARD-LOOKING STATEMENTS
 Forward-looking statements involve significant risks, uncertainties and assumptions, and
Westaims actual results could differ materially from those anticipated by these forward-looking
statements for various reasons generally beyond Westaims control.
 TM TM
 1




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CORPORATE STRUCTURE
 Business
Corporations Act
  th
  
 2




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GENERAL DEVELOPMENT OF THE BUSINESS
 The following summarizes significant events that have influenced the general development of
the business in the past three financial years. As noted in the chart above, the Company holds its
interest in its two emerging technologies through common shares in incorporated subsidiaries.
         3




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in vitro
 DESCRIPTION OF THE BUSINESS
   IFIRE TECHNOLOGY CORP.
 Overview
    4




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Partnership Agreements
      Technology Development Progress
   5




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SIMPLIFIED SCHEMATIC OF IFIRE DISPLAY STRUCTURE
 
  6




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iFire Additional Information
   NUCRYST PHARMACEUTICALS CORP.
 Overview
  
  7




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Nanocrystalline Technology Platform
    Wound Care Products
  TM
  8




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Staphylococcus aureus
  Acticoat and Acticoat Burn Dressings
 Acticoat 7 Dressing
 Acticoat Absorbent Dressings
 Acticoat Moisture Control Dressings
 Other Products
  in vitro
  9




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Government Regulation
     Competition
  10




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Smith & Nephew Agreements
     11




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Nucryst Additional Information
   12




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TM TM
 INVESTMENTS
      FINANCIAL INSTRUMENTS
  SUPPLIES AND RAW MATERIALS
   13




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ENVIRONMENTAL
     EMPLOYEES
 
 RISK FACTORS
  14




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MANAGEMENTS DISCUSSION AND ANALYSIS
  CAPITAL STRUCTURE
   DIVIDENDS
  MARKET FOR SECURITIES
  TSX Activity Summary 2006Month
    
    High ($)
    
    Low ($)
    
    VolumeJanuary
    
    
    6.47
    
    
    
    4.31
    
    
    
    8,541,553February
    
    
    6.69
    
    
    
    5.70
    
    
    
    3,978,154March
    
    
    7.64
    
    
    
    5.80
    
    
    
    7,542,456April
    
    
    7.65
    
    
    
    6.31
    
    
    
    6,501,230May
    
    
    6.45
    
    
    
    5.23
    
    
    
    5,705,778June
    
    
    5.85
    
    
    
    4.30
    
    
    
    3,641,279July
    
    
    5.49
    
    
    
    4.15
    
    
    
    1,797,127August
    
    
    4.70
    
    
    
    3.80
    
    
    
    2,563,159September
    
    
    4.21
    
    
    
    2.50
    
    
    
    7,933,264October
    
    
    2.74
    
    
    
    1.60
    
    
    
    10,895,045November
    
    
    2.15
    
    
    
    1.66
    
    
    
    6,634,440December
    
    
    2.07
    
    
    
    1.63
    
    
    
    8,239,254Year
    
    
    7.65
    
    
    
    1.63
    
    
    
    73,972,739
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TRANSFER AGENT AND REGISTRAR
  EXPERTS
  DIRECTORS AND OFFICERS
  Name and Residency
    
    Principal Occupation at Present5
    
    Period of Service as DirectorNeil Carragher1,4
Ontario, Canada
    
    Chairman of The Corporate Partnership Ltd.(a management consulting group)
    
    May 1996 to dateIan W. Delaney4
Ontario, Canada
    
    Chairman of Sherritt International Corporation(a diversified resource company involved in the
production of nickel, cobalt, oil and electricity, and
the development of coal as an energy source)
    
    May 1996 to dateRoger G. H. Downer1,4
County Clare, Ireland
    
    President Emeritus of the University of Limerick, Ireland
    
    October 2004 to dateBarry M. Heck
Alberta, Canada
    
    President and Chief Executive Officer of the Company
    
    January 2003 to dateFrank W. King2,4
Alberta, Canada
    
    President of Metropolitan Investment Corporation(a capital investment and management services company)
    
    May 1996 to dateDaniel P. Owen2,3,4
Ontario, Canada
    
    Chairman of Molin Holdings Limited(an investment management company)
    
    May 1996 to dateGuy J. Turcotte1,3,4
Alberta, Canada
    
    Chairman of Western Oil Sands Inc.(an oil sands production company)
and Fort Chicago Energy Partners L.P.(an energy and pipeline income trust)
    
    April 1998 to dateBruce V. Walter2,4
Ontario, Canada
    
    President and Chief Executive Officer of Dynatec
Corporation(a mining, mining services and metallurgical
technologies company)
    
    May 1997 to date
 
 (1)
    
    Messrs. Carragher, Downer and Turcotte are members of the Human Resources and Compensation
Committee.(2)
    
    Messrs. King, Owen and Walter are members of the Audit Committee.(3)
    
    Messrs. Carragher, Owen and Turcotte are members of the Environmental, Health and Safety
Committee.(4)
    
    Messrs. Carragher, Delaney, Downer, King, Owen, Turcotte and Walter are members of the
Corporate Governance Committee.(5)
    
    Each of the Directors has been engaged for more than five years in his present principal
occupation except the following: 16




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Names and Residency
    
    Office with CompanyIan W. Delaney,
Ontario, Canada
    
    Chairman of the Board (non-employee)Barry M. Heck,
Alberta, Canada
    
    President and Chief Executive OfficerG.A. (Drew) Fitch,
Alberta, Canada
    
    Senior Vice President and Chief Financial OfficerAnthony B. Johnston,
Alberta, Canada
    
    Senior Vice PresidentBrian D. Heck,
Alberta, Canada
    
    Vice President, General Counsel and Corporate Secretary
   
  Additional Disclosure for Directors and Executive Officers
  17




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AUDIT COMMITTEE
      18




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CODES OF CONDUCT
 www.westaim.com
 AUDIT FEES
  (in thousands of Canadian dollars)
    
    2006
    
    
    2005Audit fees(1)
    
    $
    542.5
    
    
    $
    725.5Audit-related fees(2)
    
    
    163.3
    
    
    
    29.2Tax fees(3)
    
    
    43.5
    
    
    
    144.0All other fees
    
    
    4.8
    
    
    
    8.5$
    754.1
    
    
    $
    907.2
 
 (1)
    
    Includes reviews of quarterly consolidated financial statements and review/audit of the
Companys subsidiaries or divisions financial statements, services related to regulatory
filings, and audit or involvement with prospectuses and securities filings.(2)
    
    Includes consultation on financial accounting and reporting standards and SOX 404 readiness
assistance.(3)
    
    Includes fees for tax compliance and consultation. PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES BY INDEPENDENT AUDITORS
  ADDITIONAL INFORMATION
  19




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www.sedar.com www.westaim.com
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APPENDIX A
 THE WESTAIM CORPORATION
 AUDIT COMMITTEE CHARTER
 (Revised December 2005)
 A. Overview and Mandate
 The Audit Committee (the Committee) is responsible to the Board of Directors (the Board)
of The Westaim Corporation (the Corporation). The Committee shall review the annual
consolidated financial statements of the Corporation and shall report thereon to the Board
before such annual consolidated financial statements are approved by the Board, and shall
oversee the accounting and financial reporting processes of the Corporation and the audits
of the financial statements of the Corporation. The Committee also shall perform the duties
as described under Duties and Responsibilities below.The Committee, in its capacity as a committee of the Board, shall be directly responsible
for the appointment, compensation, retention and oversight of the work of any registered
public accounting firm engaged (including for the resolution of disagreements between
management and the auditor regarding financial reporting) for the purpose of preparing or
issuing an audit report or performing other audit, review or attest services for the
Corporation (the auditor), and each auditor must report directly to the Committee.It is recognized that the Committee will be acting only within the terms of reference set
out herein and it is not intended that the Committee shall usurp any of the powers or
responsibilities of the Board as set out in the Business Corporations Act and/or the By-laws
of the Corporation.The Committee may engage independent counsel or other advisors as it determines necessary to
carry out its duties.The Corporation shall provide for appropriate funding, as determined by the Committee in its
capacity as a committee of the Board, for payment of:
 a.
    
    compensation to any auditor;b.
    
    compensation to any independent counsel or adviser employed by the Committee
pursuant to this charter; andc.
    
    ordinary administrative expenses of the Committee that are necessary or
appropriate in respect of the performance by the Committee of its duties.
 B. Membership and Attendance at Meetings
 1.
    
    The members of the Committee shall consist of not fewer than three (3)
independent Directors, all of whom shall meet the qualifications required by any
applicable regulatory authority, including The Nasdaq Stock Market, Inc. (NASDAQ) and
The Toronto Stock Exchange (the TSX). The Chairman of the Committee shall be
appointed by the Board.2.
    
    Members shall serve one-year terms and may serve consecutive terms.3.
    
    The auditor of the Corporation is entitled to receive notice of every meeting
of the Committee and be heard thereat.
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C. Duties and Responsibilities
  1.
    
    Review and assess the adequacy of this charter on an annual basis, or more
often if deemed appropriate.2.
    
    Review the annual consolidated financial statements of the Corporation and the
notes thereto following the examination thereof by the auditor and prior to their
approval by the directors and report to the directors thereon.3.
    
    Review and approve the quarterly financial statements, notes thereto and
quarterly management discussion and analysis (MD&A) and related press releases of the
Corporation prior to their release.4.
    
    Review the annual MD&A, and other public disclosure documents and related press
releases, including a prospectus prior to their approval by the directors.5.
    
    Review, and approve, the planned scope of the examination of the annual and
quarterly consolidated financial statements and all related audit activities by the
auditor of the Corporation, including expected related audit fees.6.
    
    Review the accounting principles and practices to be applied and followed by
the Corporation during the fiscal year and any significant changes from those applied
and followed during the previous year.7.
    
    Review the adequacy of the systems of internal accounting and audit policies,
practices and controls established by the Corporation, and discuss with the auditor the
results of its reviews and reports.8.
    
    Review all litigation and claims involving or against the Corporation which
could materially adversely affect its financial position and which the auditor or any
officer of the Corporation may refer to the Committee.9.
    
    Ensure the auditors ultimate accountability to the Board and the Committee as
representatives of the shareholders and as such representatives, to evaluate the
performance of the auditor and review and report to the directors regarding the
nomination and the remuneration and other material terms of the engagement of the
auditor, and the performance by the auditor thereunder, and to recommend to the
shareholders the reappointment or replacement of the auditor.10.
    
    Ensure that the auditor submits on a periodic basis to the Committee, a formal
written statement delineating all relationships between the auditor and the Corporation,
consistent with Canadian and U.S. auditor independence standards, and to review such
statement and to actively engage in a dialogue with the auditor with respect to any
disclosed or undisclosed relationships or services that may impact on the objectivity
and independence of the auditor, and to review the statement and the dialogue with the
Board of Directors and recommend to the Board of Directors appropriate action to ensure
the independence of the auditor.11.
    
    Provide a line of communication between the auditor and the Board of Directors,
and communicate directly with the auditor and with any internal auditor of the
Corporation.12.
    
    Meet with the auditor at least once per quarter without management present to
allow a candid discussion regarding any concerns the auditor may have and to resolve any
disagreements between the auditor and management regarding the Corporations financial
reporting.
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13.
    
    Review and pre-approve non-audit services provided by the auditor.14.
    
    Review and approve hiring policies regarding partners, employees, and former
partners and employees of the present and former external auditors of the Corporation.15.
    
    Review the annual Internal Audit Plan and review all reports arising from such
internal audit activity.16.
    
    Approve the Corporations Disclosure Policy and review and assess the adequacy of
the policy on an annual basis, or more often if deemed appropriate.17.
    
    Review and approve all related party transactions, as defined by the rules of
the U.S. Securities and Exchange Commission.18.
    
    Review the status of taxation matters of the Corporation and its major subsidiaries.19.
    
    Review the short term investment strategies respecting the cash balance of the
Corporation.20.
    
    Review the hedging strategies of the Corporation.21.
    
    Review the adequacy of all insurance policies maintained by the Corporation.22.
    
    Establish procedures for:
 a.
    
    the receipt, retention, and treatment of complaints received by the
Corporation regarding accounting, internal accounting controls, or auditing
matters; andb.
    
    the confidential, anonymous submission by employees of the Corporation
of concerns regarding questionable accounting or auditing matters..
 23.
    
    The Committee shall review regular reports from management and others with
respect to the Corporations compliance with laws and regulations having a material
impact on the financial statements of the Corporation.24.
    
    The Committee shall review annually the Corporations reserves with respect to
environmental, health and safety matters.25.
    
    Conduct or undertake such other duties as may be required from time to time by
any applicable regulatory authorities, including NASDAQ and the TSX.26.
    
    At least annually, undertake a self assessment of the Committees performance of
its duties.
 D. Meetings
 1.
    
    Meetings of the Committee are held as required and at least quarterly.2.
    
    Committee meetings may be called by the Committee Chairman or by a majority of
the Committee members.3.
    
    A quorum for the transaction of business at any meeting of the Committee is a
majority of appointed members.4.
    
    Meetings may be held by way of telephone conference call.
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5.
    
    A written resolution signed by all Committee members entitled to vote on that
resolution at a meeting of the Committee is as valid as one passed at a Committee
meeting.6.
    
    The Corporate Secretary will ensure that minutes of the proceedings of all
meetings of the Committee are maintained and available to the Board when requested.
 E. Reporting
 The Committee shall report on its review of the audited consolidated financial statements of
the Corporation to the Board of Directors of the Corporation prior to the approval of
financial statements by the Board of Directors. In addition, the Chairman of the Committee
shall, when deemed necessary or when requested by the Chairman of the Board of Directors,
report to the Board of Directors from time to time on the activities of the Committee.
 4