Yesterday, police descended on Hunt Rd, about 5km north of the rural settlement of Owaka, establishing cordons in their search for a "person of interest".
About 15 armed police were at the scene, along with two ambulances, several dog teams and what was believed to be a negotiation team.
Police had "engaged in dialogue with the person".
"The situation is contained and there is currently no risk to the public."
Donald "Mack" McIntosh, who lives in Tawanui, 10km west of Owaka, said he thought his brush with the alleged offender was odd, but only realised how serious it could have been when police discovered a cache of weapons in a crashed vehicle.
The encounter began at 11.30pm on Monday as a van drove up his driveway.
When Mr McIntosh investigated, a man got out and approached the house.
The man insisted he had money to pay for fuel, but Mr McIntosh repeatedly told the man he had none.
"He was curious about all the other places around here, and then he tried to tell me that he actually lived in Owaka Valley.
"I thought ‘well, given you don’t know any of the people that are living here or anything about their places, that doesn’t sound right’, but it didn’t really click at the time.
"I just thought to myself, the sooner [he’s] gone, the better."
Once the man had driven away, Mr McIntosh said he did not think much of the encounter until yesterday morning.
"He seemed just an affable, quite likeable sort of guy with a story that just didn’t gel."
About 9am yesterday, Mr McIntosh and his wife drove past the van, which was lying on its side on a winding section of the Morris Saddle Rd, about 2km north of Tawanui.
Mr McIntosh said he saw a police officer removing "about a dozen" rifles and firearm bolts from the van.
While there, he was told police were pursuing the man in Hunt Rd, about 10km northeast of Tawanui — the couple later saw the heavy police presence in the area.
"My neighbour said to me, ‘you dodged a bullet there, Mack’ — I think we did.
"You very, very seldom get anything like this. This is hugely unusual."
Cordons were in place for most of the day.
A person travelling through the area said on Facebook they were asked to move by police yesterday morning.
"Apparently something went down in Katea last night.
"No details, but locals being asked to evacuate the immediate area with armed police and road spikes at road ends."
One local said he was returning to his home in Hunt Rd about 9.30am when he encountered the police cordon near the intersection with the Owaka Highway and told he could not return to his property.
He had been rung by a neighbour who told him there was a "situation" developing at a property and police had been present for a few hours.
