He said they called police straight away and were advised to leave the property immediately.
"We dumped everything and went," Mr Shine said.
Taupo police Sergeant Stuart Duncan said although the explosives were old they were well packed and appeared to be stable.
Mr Duncan said gelignite had been commonly used in the past for breaking in land but why it had been buried on a residential Taupo property was a mystery.
Mr Shine said he believed the home was around 50 years old and had been a holiday home before he moved into it.
Labourer Adon Walker said he was digging some footings for the house when he hit the box.
In retrospect it was probably lucky that he hit the box on the side leaving only a small nick, he said.