Oil and gas is moving around our country, through pristine wilderness, and across our cities and towns. The recent election results are not going to change that. Oil is going to keep moving and will continue to increase in volume in our new energy boom. So, the question from an environmentalist's standpoint should not be how to stop it, but rather how to move it safely.

The recent debates concerning the Keystone XL and Dakota lines have focused the attention on pipelines, and show that few people want pipelines going through their communities. Continuing leaks, breaks and explosions do nothing to calm their fears.

An explosion on the Colonial Pipeline killed one worker and injured five others late in October in a wildlife area outside Helena in rural Alabama, when a nine-man crew in Shelby County hit a line with a large excavator. The same pipeline burst only a month before, close to the same spot, leaking almost 300,000 gallons and causing gasoline shortages across the South.

Reaction in the environmental community was immediate, with many calling for shutdown of pipelines and a moratorium on new pipeline construction. But the correct reaction should have been the opposite. We really must replace old pipelines and build new ones, reducing the stress on each line.

If the electric grid is our nation's nervous system, then oil and gas pipelines are our circulatory system. Aneurisms in these metal blood vessels, like what happened on the Colonial, have to be prevented.

America has over 2 million miles of oil and gas pipelines, and almost half of those are 50 years old. Over 2,000 miles of pipeline are 100 years old. While breaks do occur in young lines, the majority happen in old lines that pre-date many of our modern safety standards. And these pipes have been subjected to pressure and weather-related stresses for a long time. These pipelines should be replaced, or at least upgraded.

But what about getting rid of them altogether, as many people demand? Well, there are only four ways to move oil and gas around the country - pipelines, trucks, rail and boats.

In the United States, all of our natural gas is shipped by pipeline, and 70% of crude oil and petroleum products are shipped by pipe as well. Tankers and barges account for 23% of oil shipments, with making up 4% and rail a mere 3%. In Canada, the discrepancy is even more lopsided. Almost all (97%) of natural gas and petroleum products are transported by pipelines, according to the Canadian Energy Pipeline Association.

So which method is safer? For oil, where death and property destruction are taken into consideration, the short answer is: truck is worse than train, which is worse than pipeline, which is worse than boat. However, concerning the amount of oil spilled per billion-tonmiles, trucks are worse than pipelines, which are worse than rail, which is worse than boat, according to data from the Congressional Research Service (CRS). Then there is the question of environmental impact - dominated by damage to aquatic habitat - in which case boats are worse than pipelines, which are worse than trucks or rail.

The real answer, of course, depends on your definition of "worse." Is it deaths and destruction? Is it amount of oil released? Is it land area or water volume contaminated? Is it habitat destroyed? Is it C02 emitted?

Amid a North American energy boom and a lack of pipeline capacity, crude oil shipping on rail has suddenly increasing. Trains are getting bigger and towing more and more tanker cars. From 1975 to 2012, when trains were not as long, spills were rare and small, with about half of those years having no spills above a few gallons, according to EarthJustice.org. Then came 2013, in which more crude oil was spilled in U.S. rail incidents than in the previous 37 years.

Every crude oil has different properties, such as sulfur content (sweet to sour) or density (light to heavy), and requires a specific chemical processing facility to handle it. Different crudes produce different amounts and types of products, sometimes leading to a glut in one or more of them, like too much natural gas liquids that drops their price dramatically, or not enough heating oil that raises their price.

As an example, the second largest refinery in the United States, Marathon Oil's Garyville, LA facility, can handle over 520,000 bpd of heavy sour crude from places like Mexico and Canada, but can't handle sweet domestic crude from New Mexico. Thus the reason for the Keystone Pipeline or increased rail transport - to get heavy tar sand crude to refineries along the Gulf Coast than can handle it.

The last entirely new petroleum refinery in the United States opened in 1976, and since that time the number of refineries has steadily declined, while refining capacity has concentrated in everlarger facilities. 25% of U.S. capacity is found in only eleven refineries. Recently, Shell's Baytown refinery in Texas, the largest in the nation, was expanded to 600,000 bpd. Most of the big refineries can handle heavy crude, but many smaller refineries can process only light to intermediate crude oil, most of which originates within the United States.

So, the questions remain: which is safest method to move crude oil and most deserving of investment? Take two spills for comparison.

The Quebec train wreck last year killed 47 people and spilled 1.5 million gallons of crude onto land. The Enbridge pipeline rupture in 2010 spilled over a million gallons of similar crude into the Kalamazoo River, but did not kill anyone.

Contamination of water is definitely worse for the environment than land and spreads quickly over more area, effecting more species and habitat, but killing people makes a big difference to the public. I don't want to put a price tag on human life, but the government has, and it's about $8 million a person, according to the New York Times.

So the Quebec train derailment cost over $400 million in human life, plus another $150 million for clean-up and repairing the town. The Enbridge pipeline cost no human lives, but will cost about a billion dollars to clean-up, and, like the Exxon Valdez, the effort will never really succeed. These are not easy questions, and one's vested interest has a great deal of sway in the answer. You really do need to pick your poison.

As always, it will probably come down to money. It's simply cheaper and quicker to transport by pipeline than by rail or by truck. The difference in cost is about $50 billion a year for shipping via the Keystone vs. rail, totally eclipsing any economic effect of jobs in either direction.

A rail tank car carries about 30,000 gallons 700 bbls). A train of 100 cars carries about 3 million gallons (70,000 bbls) and takes more than three days to travel from Alberta to the Gulf Coast. (That's about a million gallons per day.) The Keystone will carry about 35 million gallons per day (830,000 bbls). This puts pressure on rail transport to get bigger and bigger, and include more cars per train, the very reason crude oil train wrecks have dramatically increased.

The CRS estimates transporting crude oil by pipeline is cheaper than rail by about $5/bbl vs. $10-15/bbl. But rail is more flexible and has 140,000 miles of track in the United States compared to 57,000 miles of crude oil pipelines. Building rail terminals to handle loading and unloading is a lot cheaper, and less of a hassle, than building and permitting pipelines.

It isn't acceptable to just say we shouldn't be moving oil, because we will be doing just that for the rest of this century, no matter what happens. So, keeping in mind the difference between death/damage to humans and damage to the environment, which would you choose?

Rail

Consider two seemingly disparate facts:

* From 1980 to 2012, the train accident rate in the United States fell 80%, the rail employee injury rate fell 85%, and the RR crossing collision rate fell 82%, but

* More crude oil was spilled in U.S. rail incidents in 2013 than was spilled in the previous thirty-seven years.

Huh?

Using data from the Pipeline and Hazardous Materials Safety Administration (PHMSA), 1.5 million gallons of crude oil were spilled from rail cars in 2013. On the other hand, from 1975 to 2012, railroads spilled a total of 800,000 gallons of crude oil, according to McClatchy news service. (These data do not include rail accidents in Canada, such as the Lac-Megantic, Quebec incident.)

If crude oil shipping on rail is becoming a preferred mode for oil producers in our North American energy boom, this trend is disturbing. In 2011, crude rail capacity between southern Alberta and the northern U.S. Great Plains tripled to about 300.000 bpd, about a third of the Keystone XL capacity.

U.S. railroads delivered 7 MMbbls of crude in 2008,46 MMbbls in 2011, 163 MMbbls in 2012, and 262 MMbbls in 2013 (almost as much as that anticipated by the Keystone XL alone). To replace the Keystone XL with rail shipments would mean another doubling of rail capacity, but that take just another couple of years given this trend.

The Association of American Railroads points out that over 11 billion gallons of crude were shipped in 2013, so these spills account for only one-hundredth of 1%. Nonetheless, damage to the environment and people's health still took place.

Our railroad infrastructure was not built to handle this mass of crude on its system and doesn't use enough specialty cars. If this trend continues, major infrastructure investments need to occur on both sides of the border, as well as significant changes in protocol and regulation.

The rail industry recently modified its guidelines in response to the Quebec derailment as follows:

* restrict train speeds to less than 50 mph

* increase the frequency of track maintenance

* install wayside defective equipment detectors, such as "hot box" detectors that detect wheels with faulty bearings, every 40 miles, with specific protocols for conductors when defects are indicated

* use only track in good condition to support speeds of 25 mph or higher.

Truck

While we can compare relative risks, the issue with trucking is that it takes a whole lot of trucks to move billions of gallons of crude since a single tank trailer only holds about 9,000 gallons or 200 bbls, a little under a third of a rail car. Our present fleet only handles 4% of our needs, so shipping by truck instead of the Keystone XL would take another million-and-a-half tanker trucks.

Trucking is the most risky form of transport from an accident and also from a spill standpoint. However, it has the least impact from an environmental standpoint since each truck is small and is mainly on land. What is important to note, however, is regardless of the long-hauling mode, most petroleum eventually gets onto a truck for the short moves. This limits the tons-mile risk but increases the incident number risk.

In a white paper, the Canadian Trucking Alliance repeated its long-standing position that "the federal government should introduce a universal mandate requiring all trucks, where the driver is currently required to carry a logbook under the federal hours of service regulations, to be equipped with an electronic recording device; and introduce a manufacturing standard (in lock-step with the United States) requiring all new heavy trucks to be equipped with a roll stability system." In addition, the Alliance wants all Canadian provinces and U.S. states to follow Ontario's and Quebec's lead by requiring truck speed limiters.

Boat

Ship transport is possible along coastal waters and in large rivers and has been used for almost all foreign imports except from Canada. The thing about ships is that each carries a lot of oil and many of the largest spills in history are from boats, such as the Exxon Valdez.

Most important is ship boat incidents have an immediate effect on aquatic ecosystems. Better modern technologies to detect water depth and nearby boats is needed. Human error needs to be better removed from this equation.

Pipeline

The most controversial transport mode is pipeline, mainly because of the Keystone XL debate and the recent ruptures. The industry points to the generally good safety record in terms of percentages. Among oil pipeline workers, the rate of hospitalization was 30 times lower compared to rail workers involved in transporting oil, and 37 times lower than for road transport, between 2005 and 2009, the latest period of data available from the Frasier Institute.

But pipeline spills are inevitable. About 280 pipeline spills occur each year in the United States that are deemed "significant" by the U.S. Department of Transportation (DOT). Significant is defined as involving a fatality or injury requiring in-patient hospitalization, $50,000 or more in costs (measured in 1984 dollars), a highly volatile liquid releases of more than 5 barrels or other liquid releases of more than 50 barrels, or a liquid releases that result in a fire or explosion.

Again, you'll notice that these measures are in human health and property damage, not environmental effects. Environmental impacts are difficult to estimate and, in almost all cases, are not even attempted.

Conclusion

In the end, all of these transportation modes can be made safer if stricter regulatory controls and modern technologies are in place, but the questions remain - can we make the industry comply, and which methods do we want to invest in?

With oil production increasing, the number of refineries decreasing, and capacity concentrating in ever fewer places, pipeline transport is not going to decrease. And there seems no better alternative. P&GJ

NEW YORK--(BUSINESS WIRE)--
The Westaim Corporation (“Westaim” or the “Company”) (TSXV: WED) today announces its unaudited financial results for the quarter ended June 30, 2026. Westaim recorded a net loss of $81.5 million ($2.45 diluted loss per share) for Q2 2026 compared to a net loss attributable to controlling interests of $0.2 million ($0.01 diluted loss per share) for Q2 2025.

“Within our Insurance segment, we continue to experience solid support from our national distribution partners, generating $303 million of premiums during Q2 and more than $660 million of premiums issued and pending through July 31, 2026. Ceres’ invested assets increased to $445 million as of June 30, 2026, all supported by the accelerating pace of our annuity policy issuances. In particular, we are very pleased with Ceres' AI native technology platform, which, as we scale, can automate 85% of operations and substantially scale the current volume with minimal additions to the infrastructure and employee base, positioning Ceres Life to drive higher return on equity than industry peers.

Within our Asset Management segment, we have made meaningful progress towards step-function growth in AUM¹ over the coming quarters, driven by new product lines and strategic joint partnerships. In addition, we have implemented more than $16 million worth of gross annualized run-rate savings, which we expect to become increasingly evident in our future results. These actions reflect our continued focus on aligning our cost structure with strategic priorities and driving sustainable improvement.” said Cameron MacDonald, Chief Executive Officer of Westaim.

"We look forward to providing additional context on our AUM growth, strategic partnerships and financial outlook at our Investor Day on Thursday, September 17, 2026."

Leadership Update

Westaim also announced today that Deanna Mulligan, Chief Executive Officer of Ceres Life, will transition to the role of Ceres Strategic Advisor. Erik Askelsen, Chief Legal Officer of Ceres, will be promoted to President of Ceres and will be named Acting Chief Executive Officer.

“It has been an honor and a privilege to serve as Ceres Life’s CEO since its founding. As an advisor and an investor, I look forward to Ceres’ continued growth under Erik’s capable leadership,” said Ms. Mulligan.

Further, Mr. MacDonald added, “Erik joined us in 2025 with a strong leadership background in the annuity industry, having worked at Athene and American Equity. We look forward to Erik’s leadership of Ceres and wish Deanna well in her new role as Ceres Strategic Advisor.”

Chinh Chu, Executive Chairman of the Board for Westaim, added, “Deanna has been instrumental in the maturation of Ceres Life from an idea into a growing annuity platform, assembling the team, the technology and the risk framework that the business runs on today. On behalf of the Board, I want to thank her for her leadership as founding Chief Executive Officer of Ceres Life, and I am glad we will continue to have the benefit of her counsel as a Strategic Advisor.”

Mr. Askelsen brings more than 25 years of insurance, regulatory and operating leadership experience. He joined Ceres Life in March 2025 as Chief Legal Officer, where he has been a member of the executive team building the company's de novo annuity platform. Mr. Askelsen has significant experience in the life and annuity industry, serving previously as Chief Legal Officer of American Equity and as General Counsel of Athene and Aviva USA, leading providers of fixed annuity products. He has also served as Chief Legal Officer and Chief Operating Officer of a payments and technology services provider and been a partner in two law firms earlier in his career.

Insurance

The Insurance segment, which primarily operates through Ceres Life Insurance Company (“Ceres” or “Ceres Life”), reported an Adjusted EBITDA² loss of $65.0 million and $85.1 million for the three and six months ended June 30, 2026. The results include net insurance service losses of $56.8 million and $67.9 million and operating expenses of $17.0 million and $31.2 million for the three and six month periods, respectively. These amounts were partially offset by interest income of $8.0 million and $13.2 million, respectively.

Our financial results reflect the early-stage nature of our insurance business. Net insurance service results remain negative as Ceres continues to scale issuance of new multi-year guaranteed annuity (“MYGA”) and fixed indexed annuity (“FIA”) policies. As we discussed last quarter, under applicable IFRS accounting treatment, both products require Ceres to recognize reserves for future policyholder obligations at the time policies are issued. This differs from US GAAP and results in upfront accounting losses on new business, including a $56.8 million reserve recognized during the quarter.

Insurance service results face near-term ramp up pressure as Ceres added $15.1 million and $288.1 million in MYGA and FIA premiums during the quarter. We continue to expect these contracts to contribute positively to operating results over time as premiums are invested, and the portfolio earns returns in excess of crediting rates. However, near-term accounting results are expected to be pressured while new business growth remains significant relative to the size of the in-force book. As the business matures and earnings from in-force contracts increasingly offset losses associated with new policy issuances, we expect this accounting impact to moderate.

Current-quarter operating expenses include approximately $1.4 million of platform build-out costs. As Ceres continues to scale and improve operating efficiency, we expect operating expenses as a percentage of policies written to decline meaningfully over time.

Asset Management

The Asset Management segment, which primarily operates through Arena Investors Group Holdings, LLC and its subsidiaries and affiliates (“Arena”), reported an Adjusted EBITDA loss of $8.0 million and $15.2 million for the three and six months ended June 30, 2026. Adjusted EBITDA for the three and six months ended June 30, 2026, included $5.9 million and $13.6 million, respectively, of management, servicing and other fee revenues less negative incentive and performance fees due to marks on unrealized positions.

As of June 30, 2026, our AUM and Programmatic Capital³ totaled $4.5 billion, with fee-paying AUM of $2.7 billion, of which $0.6 billion was managed on behalf of our Insurance segment. We continue to advance new business initiatives and partnerships that we believe can drive meaningful growth in fee paying AUM and third-party capital through the remainder of 2026 and into 2027.

We have continued to take significant steps to reduce our cost base, and we expect the benefits of these initiatives to become increasingly visible in the second half of 2026. As we continue to grow fee-paying AUM on a more efficient operating platform, we believe the business is well positioned to progress toward consistent profitability.

Corporate and Other Investments Activity

While Corporate is not considered a separate operating segment, the Corporate column in our segment reporting includes activities that reside outside of our two operating business segments. These activities include investments within the FINCOs, other cash and investments held outside the operating segments, compensation costs, including share-based compensation, for employees and directors not allocated to the operating segments, and other corporate overhead expenses.

We continue to make progress monetizing assets within the FINCOs, which had an investment balance of $116.4 million as of quarter end.

The Company continued its 2026 Normal Course Issuer Bid (“NCIB”), repurchasing 16,686 common shares at a cost of C$0.4 million. As of June 30, 2026, the Company held 306,959 shares in treasury.

Westaim's Rebrand

On Monday, September 14, 2026, Westaim will be unveiling its new name and rebrand, marking a significant milestone in the Company's evolution.

Investor Day

We are pleased to invite existing and prospective investors to Westaim’s Annual Investor Day, which will be held on Thursday, September 17, 2026, at 9:30 a.m. (Eastern Time) at the Met Life Building, 200 Park Ave, 8th Floor, New York City, New York. The agenda will include a business overview and discussion with the management teams of Westaim, Ceres Life Insurance Company, Arena Investors and CC Capital Partners, LLC, followed by a question-and-answer session.

We do hope you can join in-person or virtually via a live stream. REGISTER HERE

Segment Results

As a result of the strategic transaction with CC Capital and in accordance with IFRS, the Company now manages its operations and reports its financial results in two operating business segments: Asset Management and Insurance. Other activity for the Company outside of these two operating segments is reported in the Corporate column of our segment reporting.

This press release should be read in conjunction with Westaim’s unaudited interim consolidated financial statements (the “Financial Statements”) and management’s discussion and analysis for the three and six months ended June 30, 2026 and 2025 (the “MD&A”) which were filed on SEDAR+ at www.sedarplus.ca. These documents and the Company’s Q2 2026 Investor Presentation can be found on the Company’s website at www.westaim.com.

Non-GAAP Financial Measures and Ratios

Westaim reports its Financial Statements using Generally Accepted Accounting Principles (“GAAP”) and accounting policies consistent with International Financial Reporting Standards (“IFRS”). Westaim uses both IFRS and non-GAAP measures and ratios to assess financial performance of its business, including in this press release Adjusted EBITDA, AUM and Programmatic Capital. The Company cautions readers that non-GAAP measures and ratios do not have a standardized meaning under IFRS, should not be considered alternatives to performance measures determined in accordance with IFRS and are unlikely to be comparable to similar measures used by other companies. Readers are urged to review Section 15 Non-GAAP Measures in the MD&A (available on SEDAR+ at www.sedarplus.ca) which is incorporated by reference into this news release for quantitative reconciliations of non-IFRS measures to the most directly comparable IFRS financial measures.

About Westaim

Westaim is an integrated insurance and alternative asset management company with two primary operating businesses: Ceres Life and Arena.

Ceres Life is a cloud-native, highly scalable, de novo annuity insurance company. Inspired by the belief that technology can reinvent the way insurance providers meet the needs of investors, Ceres Life is building a nimble, highly efficient, and risk-conscious insurance company that provides simple-to-understand and easily accessible annuity products to create better outcomes for policyholders. For more information, see www.ceresinsurance.com.

Founded in 2015, Arena is a global institutional asset manager with deep expertise in credit and asset-oriented investments, including the full spectrum of corporate, real estate and structured finance opportunities. Arena provides creative solutions for those seeking competitive capital and flexibility to engage in custom transactions. For more information, see www.arenaco.com.

The Common Shares are listed on the TSX Venture Exchange (the “TSXV”) under the trading symbol “WED”.

Cautionary Note and Forward-Looking Statements

This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"), including with respect to expected results of gross annualized run-rate savings, MYGA and FIA policies contributing positively to operating results, pressure on near term accounting results, future growth in third-party capital, anticipated benefits of reductions of the cost base in the Asset Management segment, growth in fee-paying AUM driving toward consistent profitability, return on equity, timing of name change and rebrand, and timing of the Investor Day. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "project" and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions "may" or "will" occur. These statements are only predictions.

Forward-looking statements are based on the opinions and estimates of management of Westaim at the date the statements are made based on information then available to Westaim. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements including past practice of the Company. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of Westaim, which may cause Westaim’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements.

No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information regarding risks and uncertainties relating to the Company's business are contained under the heading “Risk Factors” in its annual information form for its fiscal year ended December 31, 2024.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260813058518/en/

For more information, visit our website at www.westaim.com or contact:

J. Cameron MacDonald, Chief Executive Officer;

Matt Skurbe, President and Chief Operating Officer; or

Nikita Klassen, Chief Financial Officer

The Westaim Corporation

[email protected]

(347) 802-1040

Source: The Westaim Corporation