Lawrence Andrew Mitchell pointed the blue handled-tool at the victim's stomach and said "I'll shiv ya".

But the 30-year-old told police after his arrest a few hours later that he had in fact been warning the victim to stay safe.

"He must of misunderstood me, I was just asking for a cigarette," Mitchell said.

"I didn't rob him."

He also denied taking the makeshift weapon out of his bum bag.

"He probably seen it when I was getting my tobacco out or something," Mitchell said.

The incident occurred about 8.10am on November 8, 2016.

Mitchell appeared before Albury Local Court this week, charged with demanding money and property with menaces, possessing a restricted substance and failing to appear on bail.

The ice user, who has lived in Lavington and North Albury, had approached the victim near the toilet block and bus stop on Dean Street.

The victim said to Mitchell "no mate, don't do this" after he was threatened.

Mitchell grabbed the man's jumper, pointed the screwdriver at his stomach, and asked "have you got any cash to give me or cigarettes?"

The victim handed over a cigarette which had been in his mouth and the 30-year-old put away the weapon.

The victim remained calm and made small talk before walking away from the area.

Plain clothes officers arrested Mitchell nearby about three hours after the incident.

He was asking other people for cigarettes when police spotted him near The Coffee Club and Cotton On.

A search of his bum bag found the screwdriver and four Valium tablets.

He claimed to have only been warning the victim that the streets weren't safe and said the medication wasn't his.

The incident occurred two months after a fatal stabbing.

"I probably just mentioned that stabbing, but I said 'be safe' to him, I swear," Mitchell told police.

He did not appear before court, and magistrate Rodney Brender said he was concerned he would fail to return.

He has previously failed to attend after the apparent death of a family member.

Mr Brender ordered an assessment be undertaken ahead of sentencing before Wentworth Local Court on June 4 and had his bail continued.