By Valentine Hilaire and Divya Rajagopal

TORONTO (Reuters) - Canada's First Quantum Minerals' Panama unit on Friday said it is negotiating with the workers union of a key copper mine it runs, following threats to go on strike from Saturday over a wage negotiation impasse.

Negotiations remained stuck due to disagreements over profit sharing and salary increase at the Cobre Panama mine, according to a statement published on the union's Instagram on Thursday.

"The current situation of stagnation has been caused by the company and its false promise that its latest proposals would be the best ... but they came out with the worst. The strike is maintained for next Saturday, September 9 from noon," the statement added.

It did not say what wage increase workers were asking for and the union did not immediately reply to a request for more information.

Cobre Panama, a huge open-pit copper project located in the Panama jungle, is First Quantum’s flagship operation accounting for nearly about half of First Quantum's earnings. It also accounts for about 4% of Panama's gross domestic product.

Shares of First Quantum were down more than 2% on Friday on the Toronto Stock Exchange.

Asked about the possible strike, a spokesperson from the miner's local unit Minera Panama said on Friday the company is currently negotiating with representatives of the workers union as it aims to reach a good deal for both parties through a dialogue without pressures.

"The company proposes an incentive instead of profits, which would be subject to conditions they established. And they add that this incentive would be outside the collective convention," the statement from Minera Panama Workers Union said in Spanish on Thursday, adding that the company has not offered anything new except a "penny increase."

"We urge union leaders and its members to continue to actively participate at the negotiating table," the spokesperson added.

The Canadian company in March reached a deal with the Panamanian government for a new contract to operate the mine, which is still pending for final approval from authorities.

(Reporting by Divya Rajagopal; Editing by Bill Berkrot and Marguerita Choy)