The offender was wearing a hoodie and had a red bandanna covering his face and a tattoo across his forehead.
The man forced the manager to "empty everything out'' of the safe before fleeing.
The stolen money included several bags of coins.
As the offender fled, some of the bags split open and coins scattered in the pub and across Mosgiel streets, Mr Neilson said.
"There was a money trail all the way over to Murray St,'' Mr Neilson said.
About $1000 was found scattered outside the neighbouring gun shop Taieri Arms.
Mr Neilson estimated the man fled with up to $4000 in coins.
The young manager was uninjured.
"He's very shaken but he's good.''
The manager did not recognise the offender.
CCTVs were recording in the area and the footage would help the police inquiry, he said.
Detective Sergeant Dave Nelson, of the Dunedin CIB, said about $13,000 was stolen from the safe.
"We have recovered a substantial amount of the dropped money.''
The man was described as a Maori, of solid build and about 1.8m tall.
Police inquiries were continuing, he said.
Mr Neilson said it was the first time the pub had been robbed in his seven years as publican.
"I've had a couple of attempted break-ins but never a robbery ... it's something we all know is possible but we never thought it would happen in our town.''
