Your grandfather had good taste in pocket knives - the Old Timers have a good following here at BF.
Your knife looks to have a fair amount of corrosion, and it likely formed while the knife was closed.
Locutus guessed some custom handle material, but to me it looks to be the standard Old Timer sawcut delrin - a composite material that is both tough and long lasting while looking like old bone.
Please feel free to share more photos, and look in the Traditional forum for people who enjoy all traditional styles, such as your prized Old Timer.
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