First step was to sand the handle with 100 grit sand paper. This will take most of the "gray" off and start to reveal fresh wood. Once you see fresh wood, switch to 150 grit sand paper. This will start to smooth out the roughness the 100 grit left behind. Lastly you will want to finish off the sanding with 220 grit. This will make the handle really smooth. Once its to your satisfaction, wipe off the saw dust with a damp cloth.
Now to protect the handle from the elements, give the handle a good coating of linseed oil. Wipe away the excess oil. Let the first coat dry for 24 hours, the re-apply. You will want to give your handle another coat once, maybe twice a year. Enjoy!!