'If it were Australian I would expect the other side of the colour path to be chocolate brown. I am unsure how the sun or any ageing process could turn it into a field grey?'
Fair comment, unless the patch was made up when the 59th was first formed in Egypt with half the veterans of the 7th Bn and half new recruits. The vets would have just turned their 7th patches on their sides, but the new recruits may have been short of patches, which could then have been made up of scraps of available cloth. Of course, this could also be pure bull****, but I've seen some interesting improvisations and variations during my time as a collector!
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