Can Friendly Troops be recovered after being lost in battle?

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Lost friendly troops return to the supply and can later be added back to the board via the Muster action, but they aren't automatically restored after battle. When a battle result removes friendly troops (Exchange, Overrun, or Nazgûl!), those troops are simply removed from the location [p.13 — Rolling a Battle]. The rulebook doesn't explicitly state they physically return to the supply, but the Muster action explains that troops come "from the supply" and that supply limits exist, implying removed troops rejoin the available pool for future mustering [p.13 — Muster]. To bring friendly troops back onto the board, a character must spend 1 Friendship symbol while at a matching colored location (blue/Gondor, green/Elven, brown/Rohirrim, or grey/Dwarven) to Muster 1 troop of that color into their location, provided troops of that type remain in the supply [p.13 — Muster]. Watch out: If the supply of a given troop type runs out, you cannot Muster more of that color until troops are freed up (e.g., through other game effects), and there is no other way to "recover" troops lost in battle directly back into play [p.13 — Muster].

Can Friendly Troops be recovered after being lost in battle?

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