A woman who was driving home from the marae at the time of the gun incident has spoken of her fears when she came across two men running with shotguns.
Marianne Schultz said there was a car parked in the middle of Kennedy Bay Rd.
"As I went around it, there were two men running down the road, coming towards me with shotguns.
"It wasn't until I got through it that I realised they were frothing at the mouth, it looked like they were going to shoot someone."
After she'd moved past the scene, Mrs Schultz said she pulled over to process what she'd witnessed.
"It was terrifying ... It is a remote place so when something like that happens, it's frightening."
Mrs Schultz called the marae to let them know what she had seen and they shut the gates and locked it down to wait for police to arrive.
Heavily armed police were at the marae with two people in handcuffs.
Police were also talking to another person.
A police spokesperson confirmed they were dealing with an incident in the area but were keeping all details of the operation under wraps.
Ambulances had also been called to the armed incident at the remote Coromandel bay.
A tracking dog arrived at about 1pm in a police helicopter.
A woman at the marae, who did not wish to be named, said she heard several gun shots and said there were people running around with guns on the main street.
She said there were a lot of children at the marae this holiday weekend and they were all very scared.
An elder at Harataunga Marae said police had been "running everywhere" in the past hour.
"I didn't see or hear anything but we've been told to sit tight."
About 20 people -- mostly children -- were at the marae, the elder said.
He said Kennedy Bay was a small family community with no shops or businesses.
"Nothing like this has ever happened, not in this century anyway," he said.
