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The buy-back and amnesty event began at 10am at the Taieri Rugby Football Club in Reid Ave, Mosgiel, and runs until 2pm, the first such collection in Otago and Southland.
There is a heavy police presence at the rugby club and the mood on the ground is good.
The process of handing in and receiving the compensation appears to take only a few minutes.
A man who was leaving the event after handing in his now-illegal rifle said police were handling the collection well and had even provided coffee and pastries.
He was pleased to have received 75% of the gun's base price, he said.
Today's event will be followed by two others in Dunedin tomorrow and on Sunday, both at the Kensington Army Hall, in Bridgman St, between 10am and 2pm.
The 24 collections in Otago and Southland will take place at locations ranging from rugby and yacht clubs to racing tracks. The last will take place on September 22, at the Marakura Yacht Club, in Te Anau.
Some owners reluctant to attend collections
A Dunedin man who owns several now-illegal firearms said yesterday he will not be attending the area's first collection event in Mosgiel today.
The man spoke on condition of anonymity and the Otago Daily Times was unable to find any gun owners who would be named yesterday.
Several feared their firearms could be targeted by thieves if they were identified, and none said they would be attending today's collection.
The man said he wanted to wait to see how today's collection for the buy-back in Mosgiel went before deciding whether he would attend a later event to surrender his now-forbidden rifles.
The amnesty runs until December 20 and his preference would be to hand over his guns, which included several military-style semi-automatics, to police in a more private, low-key setting, he said.
The possibility of having a media presence at firearms-surrendering events also put him off.
While he was unhappy about the prospect of surrendering his firearms he would be abiding by the law, he said.
"I'd rather not have to, but it is what it is."